Banking and inequality: US state evidence. Issue 4 (1st December 2018)

• Record Type: Journal Article
• Authors: Xu, Chen; Giedeman, Daniel C.; Compton, Ryan A.; Hoover, Gary A.
• Is Part Of: Social science journal. Volume 55:Issue 4(2018)
• Page Start: 396
• Page End: 403
• Publication Date: 2018-12-01
• Subjects: G00 -- I3 -- O16; Financial development -- Inequality -- Banking deregulation; Social sciences -- Periodicals; 300.5
• DOI: 10.1016/j.soscij.2018.07.002
• Languages: English
• ISSNs: 0362-3319

Abstract

Abstract: The question of how financial development affects economic inequality is a subject of much debate. This paper adds to this literature by examining whether banking deregulation affects income inequality using state-level data from the United States from the late 20th century. Specifically, we test the hypothesis that the deregulation of interstate branch-banking restrictions had an effect on income inequality as measured by the Gini Coefficient and Thiel Index. We conduct our tests using fixed-effects OLS models and System GMM dynamic panel analysis. Our results suggest that branching deregulation has resulted in increased income inequality in the United States.