Economic Growth, Financial Deepening, Income Distribution, Financial Efficiency and Poverty Levels in East African Community Countries
Abstract
The main objective of this study was to investigate the relationship between economic
growth, financial deepening, income distribution, financial efficiency and poverty levels
in East African Community countries. The specific objectives of the study included
establishing the effect of economic growth on poverty levels in EAC countries;
determining the effect of financial deepening on the relationship between economic
growth and poverty levels in EAC countries; examining the effect of income distribution
on the relationship between economic growth and poverty levels in EAC countries;
examining the effect of financial efficiency on the relationship between economic growth
and poverty levels in EAC countries; determining the joint effect of economic growth,
financial deepening, income distribution and financial efficiency on poverty levels in
EAC countries; and comparing the relationship between economic growth, financial
deepening, income distribution and financial efficiency on poverty levels among EAC
countries. The research design used in this study was a combination of comparative and
descriptive. The financial intermediation theory, liberal theory, information asymmetry
theory, public choice theory of distribution and neoclassical utility theory were the major
theories that underpinned this research project. Through the course of the study, the
positivism philosophy was followed. Kenya, Rwanda, Uganda, Burundi, and Tanzania
were the five countries studied as part of the East African Community (EAC) study. It
was necessary to collect annual data for the study's duration, which spanned from 1989 to
2018. The study made use of secondary data, which consisted primarily of annual data.
Feasible Generalized Least Squares (FGLS) panel data regression models and hypotheses
testing to determine whether there is a causal effect link between the various variables,
inferential statistics analysis was carried out. A significant mediating effect on the
relationship between economic growth and poverty levels in East African Community
countries, according to the findings of the study, was also discovered. The study also
discovered that income distribution has a significant mediating effect on the relationship
between economic growth and poverty levels in countries of the Eastern African
Community. Additionally, according to the findings of the study, financial efficiency has
no statistically significant moderating effect on the relationship between economic
growth and poverty levels in East African Community countries. After all was said and
done, researchers discovered that the combined effect of economic growth, financial
deepening, income distribution, and financial efficiency on poverty levels in the East
African Community countries was statistically significant. Thus, policy recommendations
and implications for the EAC countries are provided as a result of the study's results.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1411]
The following license files are associated with this item: