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Social Capital and Income Inequality in OECD Countries: Causality Evidence

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Business Development and Economic Governance in Southeastern Europe

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Abstract

Social capital has declined in both developments and in other developing economies, while income inequality has tended to increase. Recent studies show the correlation between social capital and income inequalities, while few studies analyse the direction of causality at a macro level. This paper aims to investigate the causal relationship between generalised trust, as well as income inequalities in 23 economies belonging to the Organisation for Economic Cooperation and Development (OECD) from 2000 to 2019. In this study, we use the application of a fully modified least squares model (FMOLS) and the canonical correlation regression estimator (CCR). In addition, the unit root and cointegration test is applied before applying the Granger causality test. The findings show that there is a bidirectional relationship between social capital and income inequality.

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Authors and Affiliations

  1. Management and Accounting Faculty, University of Veracruz, Xalapa, Mexico

    Nalleli Patricia Bolaños Pérez

  2. Economics and Social Higher Studies Research Institute, University of Veracruz, Xalapa, 91190, Mexico

    Nalleli Patricia Bolaños Pérez & Edgar J. Saucedo-Acosta

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  1. Nalleli Patricia Bolaños Pérez
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  2. Edgar J. Saucedo-Acosta
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Correspondence to Edgar J. Saucedo-Acosta .

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Editors and Affiliations

  1. Neapolis University Pafos, Paphos, Cyprus

    Pantelis Sklias

  2. Department of Economics, International Hellenic University, Serres, Greece

    Persefoni Polychronidou

  3. Department of Accounting and Finance, International Hellenic University, Kavala, Greece

    Anastasios Karasavvoglou

  4. Democritus University of Thrace, Komotini, Greece

    Victoria Pistikou

  5. University of Peloponnese, Tripoli, Greece

    Nikolaos Apostolopoulos

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Bolaños Pérez, N.P., Saucedo-Acosta, E.J. (2022). Social Capital and Income Inequality in OECD Countries: Causality Evidence. In: Sklias, P., Polychronidou, P., Karasavvoglou, A., Pistikou, V., Apostolopoulos, N. (eds) Business Development and Economic Governance in Southeastern Europe. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-031-05351-1_2

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