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Who Benefits? : A cross sectional study on the use of Fintech and reduction of income inequality

Fintech has been promoted as a tool for financial inclusion and in turn income inequality reduction. While previous research in large has shown a negative relationship between Fintech adaptation and income inequality there are discrepancies regarding whether this is the case across countries. The purpose of this thesis is therefore to answer if financial inclusion through an increase in active Fintech users reduce income inequality and if the relationship differs across regions and income groups. The study is based on cross sectional data for 86 countries, primarily sourced from the World Bank’s Global Findex and World Development Indicators databases. The relationship between Fintech and income inequality is initially estimated through an OLS multiple variable regression, but due to endogeneity issues a 2SLS instrument variable regression is employed. The results find a statistically significant negative relationship between Fintech and income inequality of -0,32 for the entire sample. A similar negative relationship is however only present among higher income countries and in Western Europe and North America, suggesting that Fintech may not be a panacea for income inequality reduction.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:uu-477692
Date January 2022
CreatorsGlimt Jensen, Gustav
PublisherUppsala universitet, Nationalekonomiska institutionen
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

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