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Financial development, institutions and poverty alleviation: an empirical analysis

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  • Alessandra Cepparulo
  • Juan C. Cuestas
  • Maurizio Intarglia

Abstract

The aim of this paper is to empirically analyse whether the level of institutional quality influences the effect of financial development on poverty for a sample of developing countries covering the period from 1984 to 2012, or not. Using an interaction term constructed as a product between financial development and institutional qualitywe find that the pro-poor impact of financial development decreases as the quality of institution rises. Such differential effect can be ascribed to the capacity of banks to provide functions that mimic those performed by a wellworking institutional framework.The results of this paper can be used for policy management.

Suggested Citation

  • Alessandra Cepparulo & Juan C. Cuestas & Maurizio Intarglia, 2015. "Financial development, institutions and poverty alleviation: an empirical analysis," NCID Working Papers 01/2015, Navarra Center for International Development, University of Navarra.
    • Handle: RePEc:nva:unnvaa:wp01-2015
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial development; Institutional quality; Poverty alleviation; Developing countries;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • I2 - Health, Education, and Welfare - - Education
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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