Financial technology and income inequality: an empirical investigation

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Abstract The study empirically examined the emerging literature on the relationship between income inequality and financial technology. Relying on data for 18 emerging economies over 2012–2022 and panel estimation techniques, the study investigated how financial technology affect income inequality. The findings of the study reveal a negative and significant relationship between financial technology and income inequality. Increase in use of financial technology is associated with decreasing income inequalities for the countries in the study. Furthermore, the results of the study indicate that government effectiveness increases income inequalities for the sample of countries used in the study. This study is related to innovation with a focus on finance, contributing to a small but growing literature on the role of financial technology on income inequality particularly in emerging economies. The findings of the study contribute to better understanding of the determinants of income inequality.

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