Publication Type

Master Thesis

Publication Date



This paper conducts a comprehensive analysis to understand how stock market ratios affect net income inequality. The study of how finance impacts income distribution is relevant as the income distribution of a nation influences savings decisions, resource allocation, innovation incentives and public policy and hence impacts the process of economic development. Using a cross-sectional data set of 68 countries and panel data set of 61 countries from 1975 to 2005, I apply cross-sectional OLS and panel regressions to look at how stock market size, liquidity, and activity impact income inequality. While stock market size is found to strongly impact income inequality in an inverse-U manner, weak evidence is found for stock market liquidity in reducing income inequality. No strong evidence is however found for stock market activity to affect income inequality.


economic development, income distribution, income inequality, stock market, wealth

Degree Awarded

MSc in Economics


Finance | Portfolio and Security Analysis


HOON, Hian Teck

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.