Are Trade Liberation and Financial Development Reducing Poverty? Evidence from New Industrialized Countries

Year 2022, , 768 - 783, 30.04.2022

Hüseyin Çelik

https://doi.org/10.21547/jss.1003118

Cited By: 1

Abstract

The aim of this study is to investigate the effect of trade liberalization and financial development on the level of poverty. For this purpose, empirical applications have been made for the New Industrializing Countries with the data covering the years 1985-2020. In the study, CADF unit root test, ECM cointegration test, CCE coefficient estimator and Dumitrescu-Hurlin (2012) panel causality tests were used. In the model, the ratios of household final consumption expenditures, loans given to the private sector by banks, exports and imports to GDP, and economic growth indicators are used. According to the results obtained, it was concluded that imports reduce poverty, but financial development, exports and economic growth affect poverty negatively. According to the panel causality results, bidirectional causality was obtained between exports and imports with poverty. Unidirectional causality was obtained from poverty to economic growth and financial development.

Keywords

Poverty, Financial Development, Trade Liberation, Dumitrescu-Hurling

Ticari Serbestleşme ve Finansal Gelişmişlik Yoksulluğu Azaltıyor mu Yeni Sanayileşen Ülkelerden Kanıtlar

Abstract

Bu çalışmanın amacı ticari serbestleşme ve finansal gelişmişliğin yoksulluk düzeyi üzerindeki etkisini araştırmaktır. Bu amaç doğrultusunda 1985-2020 yıllarını kapsayan veriler ile Yeni Sanayileşen Ülkeler için ampirik uygulamalar yapılmıştır. Çalışmada yöntem olarak CADF birim kök testi, ECM eşbütünleşme testi, CCE katsayı tahmincisi ve Dumitrescu-Hurlin (2012) panel nedensellik testleri kullanılmıştır. Modelde, hane halkı nihai tüketim harcamalarının ve banklar tarafından özel kesime verilen kredilerin, ihracat ve ithalatın GSYH’ye içindeki oranları ile ekonomik büyüme göstergeleri kullanılmıştır. Elde edilen sonuçlara göre ithalatın yoksulluğu azalttığı ancak finansal gelişmişlik, ihracat ve ekonomik büyümenin yoksulluğu negatif etkilediği sonucuna varılmıştır. Panel nedensellik sonuçlarına göre ise ihracat ve ithalat ile yoksulluk arasında çift yönlü nedensellik elde edilmiştir. Yoksulluktan ekonomik büyüme ve finansal gelişmişliğe tek yönlü nedensellik elde edilmiştir.

Keywords

Yoksulluk, Finansal gelişmişlik, Ticari serbestleşme, Dumitrescu-Hurling

References

• Afzal, M., Malik, M., Begum, I., Sarwar, K., & Fatima, H. (2012). Relationship among education, poverty and economic growth in Pakistan: An econometric analysis. Journal of Elementary Education, 22(1), 23-45.
• Agusalim, L. (2017). The dynamic impact of trade openness on poverty: An empirical study on Indonesia's economy. International Journal of Economics and Financial Issues,, 2017(1), 566-574.
• Alam, M., & Alam, M. (2021). Financial development, economic growth and poverty reduction in India. Etikonomi, 19(1), 13-22. doi:https://doi.org/10.15408/etk.v20i1.18417.
• Aydın, M. (2019). Renewable and non-renewable electricity consumption-economic growth nexus: Evidence from OECD countries. Renewable Energy, 136(2019), 599-606.
• Bayar, Y., & Sezgin, H. (2017). Trade openness, inequality and poverty in Latin America Countries. Economika, 96(1), 47-58. doi:https://doi.org/10.15388/Ekon.2017.1.10663
• Destek, M., & Sakodia, S. A. (2019). Investigation of environmental Kuznets curve for ecological footprint: The role of energy andfinancial development. Science of the Total Environment, 650(2019), 2483-2489. doi:https://doi.org/10.1016/j.scitotenv.2018.10.017
• Dumitrescu, E.-I., & Hurlin, C. (2012). Testing for Granger non-causality in heterogeneous panels. Economic Modelling, 29(2019), 1450-1460. doi:doi:10.1016/j.econmod.2012.02.014
• Dung, X. (2004). The impact of trade openness on growth, poverty, and inequality in Vietnam: Evidence from cross-province analysis. 53rd AFSE Congress, (s. 1-18).
• Evcim, N., Güneş, S., & Karaalp Orhan, H. (2019a). Yoksulluk, eşitsizlik ve büyüme ilişkisi: Türkiye düzey-1 örneği. Yönetim ve Ekonomi Araştırma Dergisi, 17(4), 145-164. doi:http://dx.doi.org/10.11611/yead.570805
• Evcim, N., Güneş, S., & Karaalp Orhan, H. (2019b). Yoksulluk ve ekonomik göstergeleri arasındaki ilişki: MENA bölgesi analizi. Pamukkale Üniversitesi Sosyal Bilimler Dergisi(36), 291-310.
• Fosu, A. (2011). Growth, Inequality, and Poverty Reduction in Developing Countries. WIDER Working Paper, Working Paper No. 2011/01, 1-52. 08 05, 2021 tarihinde https://www.econstor.eu/bitstream/10419/54015/1/644542136.pdf adresinden alındı
• Goff, M., & Singh, R. (2014). Does trade reduce poverty? A view from Africa. Journal of African Trade, 1(2014), 5-14.
• Güloğlu, B., & İvrendi, M. (2010). Output fluctuations: Transitory or permanent? The case of Latin America. Applied Economics Letters, 17(4), 381-386. doi: 10.1080/13504850701735880
• Inoue, T., & Hamori, S. (2012). How has financial deepening affected poverty reduction in India? Empirical analysis using state-level panel data. Appl Financ Econ, 22(5), 395–408.
• Khan, R., & Bashir, N. (2011). Trade Liberalization, Poverty and Inequality Nexus: A Case Study of India. Asian Economic and Financial Review, 1(3), 114-119.
• Khan, R., & Bashir, N. (2012). Trade, Poverty and Inequality Nexus: The Case of Pakistan. World Applied Sciences Journal, 18(5), 722-726. doi:10.5829/idosi.wasj.2012.18.05.1255
• Khan, Z., Hussain, M., Shahbaz, M., Yang, S., & Jiao, Z. (2020). Natural resource abundance, technological innovation, and human capital nexus with financial development: A case study of China. Resources Policy, 65(2020), 1-13. doi:https://doi.org/10.1016/j.resourpol.2020.101585
• Moluk, D., Kogid, M., Asid, R., & Lily, J. (2012). Is economic growth suficient for poverty alleviation? Empirical evidence from Malaysia. Cuadernos de economía, 35, 26-32.
• Nguyen, H., Nguyen, C., & Nguyen, C. (2020). The effect of economic growth and urbanization on poverty reduction in Vietnam. Journal of Asian Finance, Economics and Business, 7(7), 229-239. doi:10.13106/jafeb.2020.vol7.no7.229
• Onakoya, A., Johnson, B., & Ogundajo, G. (2019). Poverty and trade liberalization: empirical evidence from 21 Africa countries. Economic Research-Ekonomska Istrazivanja, 32(1), 635-656. doi:https://doi.org/10.1080/1331677X.2018.1561320
• Pesaran, M. (2006). Estimation and Inference in Large Heterogeneous Panels with A Multifactor Error Structure. Econometrica, 74(4), 967-1012.
• Pradhan, B., & Mahesh, M. (2014). Impact of trade openness on poverty : A panel data analysisi of a set of developing countries. Economics Bulletin, 34(4), 2208-2219.
• Rama, M. (2003). Globalization and Workers in Developing Countries. World Bank Policy Research Working Paper, 1-44.
• Santos-Paulino, A. (2017). Estimating the impact of trade specialization and trade policy on poverty in developing countries. The journal of international trade and Economic development, 26(6), 693-711.
• Sehrawat, M., & Giri, A. (2018). The Impact of Financal Development, Economic Growth, income equality on poverty: evidence from India. Empir Econ, 1585-1602. doi:https://doi.org/10.1007/s00181-017-1321-7
• Shahbaz, M., Nasir, M., & Roubaud, D. (2018). Environmental degradation in France: The effects of FDI,financial development, and energy innovations. Energy Economics, 74(2018), 843-857. doi:https://doi.org/10.1016/j.eneco.2018.07.020
• Shahid, M., Shah, M., Parveen, F., & Kiani, A. (2017). Economietric Impact of Governance and Trade Liberalization on Poverty: A Case Study. Pakistan Business Review, Oct 2017, 545-559.
• Uddin, G., Shahbaz, M., Arouri, M., & Teulon, F. (2014). Financial development and poverty reduction nexus: A cointegration andcausality analysis in Bangladesh. Economic Modelling(36), 405-412. doi:http://dx.doi.org/10.1016/j.econmod.2013.09.049
• Wikipedia. (2021, 07 15). Yeni Sanayileşen Ülkeler: https://tr.wikipedia.org/wiki/Yeni_sanayile%C5%9Fen_%C3%BClkeler (15.07.2021)
• Yameogo, C., & Omojolaibi, J. (2021). Trade liberalisation, economic growth and poverty levelin sub-Saharan Africa (SSA). Economic Research, 34(1), 754-774. doi:https://doi.org/10.1080/1331677X.2020.1804428
• Yusuf, M., Malarvizhi, C., & Khin, A. (2013). Trade liberalization economic growth and poverty reduction in Nigeria. International Journal of Business and Management, 8(2), 42-48.