Relationship between Technology Penetration, Financial Development and Poverty Nexus in Emerging Markets
Keywords:
Technology, Financial Markets, Poverty, Panel Data, BRICSAbstract
Objectives: The study investigated the impact of technological penetration on poverty alleviation in emerging markets (BRICS). The study also investigated if the financial development facilitated the impact of technology on poverty in BRICS. Prior Work: Previous empirical research on the technology penetration-financial development-poverty nexus failed to agree, their results are divergent and conflicting. Approach: The study employed panel data analysis methods such as FMOLS (fully modified ordinary least squares), pooled OLS (ordinary least squares) and fixed effects. Panel data ranging from 1995 to 2021 was used in this study. Results: Technology penetration reduced poverty in most cases except under FMOLS, under which technology was found to have increased mortality rate. Poverty was also found to have been significantly reduced by financial development under pooled OLS (model 1 and 3), FMOLS and fixed effects (model 2 and 3). All the three panel methods show that financial development improved technology’s ability to significantly reduce poverty. Implications: BRICS should therefore implement financial system development and technology enhancing policies to be able to decisively address poverty and all its ramifications. Value: The study clearly shows that developed financial markets enhances technology penetration’s ability to contribute towards poverty alleviation in BRICS.
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