MST-Department of Economic Theory

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Browsing MST-Department of Economic Theory by Author "Kang’ethe, Veronicah Wangui"

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    Effects of Regional Integration on Income Inequality in the East African Community
    (Kenyatta University, 2024-04) Kang’ethe, Veronicah Wangui
    Regional integration refers to how two or more nations work together to promote peace, stability, and prosperity. State obstacles that impede the flow of people, capital, commodities, services, and ideas can be removed with the aid of regional integration. The East African Community has been one of Africa's most growing trading blocs in terms of Gross domestic growth. The desire to raise the standard of living within its community propelled the growth of the East African community. Increasing value addition in production, trade, investment, and competitiveness are some of the main strategies that could assist the region in realizing this objective. However, income inequality has been a huge regional problem across many countries in East Africa, hence reducing the effects of the region's positive economic development. The primary goal of this research was to assess how regional integration affected income disparity in the East African Community. Using the panel data, this study empirically analyzed the impacts of regional integration on income disparity in the East African Community from 2000 to 2021. The study considered both economic and financial integration. Random effects method was used in the analysis. The normality, heteroscedasticity, autocorrelation, and multicollinearity tests are among the key diagnostic tests that were done. According to the regression analysis, trade openness and exchange rate, foreign direct investment was seen to reduce income disparity in contrast with economic freedom index and unemployment rate which was seen to increase income inequality. Real interest rate, inflation rate, education personal remittance received as a percentage of Gross Domestic Product and domestic credit to the private sector were found to be statistically insignificant.