Assessing the Impact of Income Redistribution on Growth: Evidence From the E6 Countries

This study examines the effect of income distribution on economic growth across the E6 countries, namely China, Türkiye, Mexico, Brazil, Russia, and India, from 1988 to 2021, employing the Panel Corrected Standard Errors (PCSE) method. The findings, based on the PCSE estimations and preliminary tests including cross-sectional dependence, unit root tests, and the Westerlund cointegration test, can be summarized as follows: i) Models exhibit cross-sectional dependence (CSD) according to various CD tests. ii) There is a long-term relationship among the variables according to the Westerlund cointegration test. iii) The growth-enhancing effect of absolute redistribution on the economic growth rate has been observed. iv) The growth-promoting effect of absolute redistribution is also confirmed through the use of the relative redistribution variable. v) Based on these findings, the study offers policy recommendations and outlines directions for future research on the topic.