MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY
---------------------------------
NGUYEN THI THANH DUONG
THE IMPACT OF FINANCIAL INTEGRATION ON POVERTY IN DEVELOPING COUNTRIES IN THE ASIAN REGION
DOCTORAL THESIS
FINANCE - BANKING INDUSTRY
HANOI – 2021
MINISTRY OF EDUCATION AND TRAINING NATIONAL ECONOMICS UNIVERSITY
---------------------------------
NGUYEN THI THANH DUONG
THE IMPACT OF FINANCIAL INTEGRATION ON POVERTY IN DEVELOPING COUNTRIES IN THE ASIAN REGION
Major: Finance - Banking Code: 9340201
DOCTORAL THESIS
Scientific supervisor: Associate Professor, Dr. Dang Ngoc Duc
HANOI - 2021
COMMITMENT
I have read and understand the violations of academic integrity. I declare on my personal honor that this thesis is my own work and does not violate the requirements of academic integrity.
PhD student
Nguyen Thi Thanh Duong
INDEX
COMMITMENT i
TABLE OF CONTENTS ii
LIST OF ABBREVIATIONS v
LIST OF TABLES
LIST OF FIGURES vii
INTRODUCTION 1
Chapter 1: OVERVIEW OF RESEARCH WORKS 11
1.1. Overview of theoretical studies on the impact of financial integration on poverty 11
1.2. Overview of empirical studies on the impact of financial integration on poverty 15
1.3. Research Gap 23
CHAPTER 1 CONCLUSION 25
Chapter 2: THEORETICAL BASIS OF THE IMPACT OF FINANCIAL INTEGRATION ON POVERTY STATUS OF COUNTRIES 26
2.1. Overview of financial integration 26
2.1.1. Concept of financial integration 26
2.1.2. Financial integration roadmap 28
2.1.3. Indicators measuring the level of financial integration 31
2.1.4. Benefits and costs of financial integration 35
2.2. Basic issues of poverty 38
2.2.1. Concept of poverty 38
2.2.2. Causes of poverty 40
2.2.3. Indicators measuring poverty levels 43
2.3. The impact of financial integration on poverty 46
2.3.1. The impact of financial integration on poverty through the economic growth channel 46
2.3.2. The impact of financial integration on poverty through the financial crisis channel 53
2.3.3. The impact of financial integration on poverty through credit channels and financial development 55
2.4. Experiences on the financial integration roadmap and the poverty reduction process of developing countries in the world 58
2.4.1. Chile's financial integration roadmap and poverty reduction..59
2.4.2. Indonesia's financial integration roadmap and poverty reduction 62
2.4.3. Thailand's financial integration roadmap and poverty reduction 66
2.4.4. Lessons learned on the financial integration roadmap and poverty reduction policies for developing countries in Asia during the period 2005-2018 70
CHAPTER 2 CONCLUSION 73
Chapter 3: THE CURRENT STATUS OF THE IMPACT OF FINANCIAL INTEGRATION ON THE POVERTY STATUS OF DEVELOPING COUNTRIES IN THE ASIAN REGION 74
3.1. Current status of financial integration of developing countries in Asia 74
3.1.1. Overview of the financial integration process of developing countries in Asia 74
3.1.2. Current status of financial integration level of developing countries in Asia 76
3.2. The current situation of the impact of financial integration on poverty in developing countries in Asia. 87
3.2.1. Overview of poverty in developing countries in Asia 87
3.2.2. The impact of financial integration on poverty in developing countries in Asia 95
CHAPTER 3 CONCLUSION 111
Chapter 4: ESTIMATION OF THE IMPACT OF FINANCIAL INTEGRATION ON POVERTY IN DEVELOPING COUNTRIES IN THE ASIAN REGION 112
4.1. Model to assess the impact of financial integration on poverty 112
4.2. Variables and research data used in model 113
4.3. Estimation method 121
4.3.1. Fixed effects and random effects estimation methods 121
4.3.2. General Moment Estimation Method 123
4.4. Model testing results 124
4.4.1. Estimating the model using fixed effects and random effects methods 124
4.4.2. Model estimation using the generalized method of moments 129
CHAPTER 4 CONCLUSION 133
Chapter 5: SOME RECOMMENDATIONS FOR DEVELOPING COUNTRIES IN THE ASIAN REGION 134
5.1. Regional and global context of financial integration and poverty status of countries by 2030 134
5.1.1. The context of the 4.0 industrial revolution will enhance global connectivity in trade and finance 134
5.1.2. The COVID-19 pandemic context affects financial integration and poverty 135
5.1.3. Orientation of cooperation and economic development of developing countries in Asia after the COVID-19 pandemic 138
5.2. General recommendations for developing countries in the Asia region... 139
5.2.1. Recommendations to governments of developing countries in Asia 139
5.2.2. Recommendations for the financial systems of developing countries in Asia 145
5.2.3. Recommendations for the poor in developing countries in Asia 147
5.3. Specific recommendations for different income groups of developing countries in the Asia region 149
5.3.1. Recommendations for the group of upper-middle-income countries 149
5.3.2. Recommendations for the group of middle-income countries 149
5.3.3. Recommendations for the group of countries with below-average income... 150
5.4. Specific recommendations for Vietnam 151
CHAPTER 5 CONCLUSION 154
CONCLUSION 155
LIST OF SCIENTIFIC WORKS RELATED TO THE THESIS 157
REFERENCES 158
APPENDIX 168
LIST OF ABBREVIATIONS
Acronym
Interpretation | |
AREAER | Annual Report on the Agreement Exchange and Exchange Restrictions |
ADB | Asian Development Bank |
FAL | Total assets and total foreign debt |
FA | Total foreign assets |
FL | Total foreign debt |
FDI | Foreign Direct Investment |
FEM | Fixed effects model |
GNI | National income |
GDP | Gross domestic product |
GMM | General moment method |
HDI | Human Development Index |
HPI | Human Poverty Index |
IMF | International Monetary Fund |
MPI | Multidimensional poverty index |
Commercial Bank | Commercial Bank |
State Bank of Vietnam | State Bank |
OLS | Ordinary least squares |
PRSP | Poverty Reduction Strategy Report |
REM | Random effects model |
UNDP | United Nations Development Programme |
WB | World Bank |
WTO | World Trade Organization |
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LIST OF TABLES
Table 1.1: Summary of empirical research 18
Table 3.1: Foreign assets in Asia 86
Table 3.2: External debt in Asia 86
Table 3.3: Ratio of domestic credit to the private sector/GDP of developing countries in Asia, 2005-2018 103
Table 3.4: Ranking of financial service quality in some developing countries in Asia 104
Table 4.1: Correlation between HDI and poverty in developing countries in 2016 114
Table 4.2: List of variables, measures, data sources 119
Table 4.3: Statistical description of research data in model 121
Table 4.4: Results of estimating the impact of international financial integration on poverty using the Driscoll & Kraay method 126
Table 4.5: Model results when using the system GMM estimation method ... 129