Authors: Kunofiwa Tsaurai
Addresses: Department of Banking, Risk Management and Finance, University of South Africa, P.O Box 392, UNISA, 0003, Pretoria, South Africa
Abstract: The study's three objectives were to investigate: 1) impact of economic growth on poverty; 2) financial development's influence on poverty; 3) if financial development is an avenue through which economic growth alleviates poverty in emerging markets. The study used the dynamic generalised methods of moments (dynamic GMM) with annual panel data covering the period from 2005 to 2019. Economic growth was found to have non-significantly reduced poverty whilst financial development significantly reduced poverty levels in emerging markets. On the other hand, the complementarity between economic growth and financial development was found to have enhanced poverty reduction efforts in emerging markets. Financial development was found to be a channel through which economic growth reduced poverty in emerging markets. Emerging markets are therefore urged to implement financial development enhancement policies in order to successfully fight off poverty.
Keywords: economic growth; financial development; poverty; generalised methods of moments; GMM; emerging markets.
International Journal of Services, Economics and Management, 2021 Vol.12 No.1, pp.93 - 108
Received: 25 Jan 2020
Accepted: 21 Sep 2020
Published online: 26 Feb 2021 *