Research Article


DOI :10.26650/ISTJECON2022-1058516   IUP :10.26650/ISTJECON2022-1058516    Full Text (PDF)

The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution

Esat DaşdemirHalil Tunalı

This study makes a comparative analysis on the spread of ownership and capital ownership by associating it with income distribution. The spread of property and capital ownership to the base diversifies the type of income individuals receive from the functional income distribution. When these two elements spread to the base, inequality in the functional income distribution will affect the interpersonal income distribution less, and diversity TThis study makes a comparative analysis on the spread of ownership and capital ownership by associating it with income distribution. The spread of property and capital ownership to the base diversifies the type of income individuals receive from the functional income distribution. When these two elements spread to the base, inequality in the functional income distribution will affect the interpersonal income distribution less, and diversity in individuals’ income will contribute to social peace. The study emphasizes within its scope the distinction between income distribution and wealth distribution and numerically explains the relationship income distribution as a flow variable has with wealth distribution as a stock variable. In order to test the study’s theoretical discourse, it conducts a panel data analysis using the annual frequency data from 15 countries covering the 2003-2018 period. The analysis uses the ratio of market value to revenue from publicly offered shares traded in countries’ stock exchanges to represent the spread of ownership and capital to the base. According to the obtained results, an increase in the ratio of publicly traded stocks improves income distribution; in other words, the GINI coefficient decreases. This result was determined to be more intense in the Turkish economy with the dummy variables that were used. An increase in the consumption rate, which was used as a control variable in the model, results in income distribution deteriorating. The study will fill an important gap in the literature with its conclusions, determinations, and policy recommendations.

JEL Classification : D30 , E20 , G32 , G51
DOI :10.26650/ISTJECON2022-1058516   IUP :10.26650/ISTJECON2022-1058516    Full Text (PDF)

Sermaye Sahipliği ve Mülkiyetin Tabana Yayılmasının İktisadi Gelir Dağılımına Etkisi

Esat DaşdemirHalil Tunalı

Bu çalışma mülkiyetin ve sermaye sahipliğinin tabana yayılması konusunu gelir dağılımı ile ilişkilendirilerek karşılaştırmalı inceleme yapmıştır. Mülkiyetin ve sermaye sahipliğinin tabana yayılması, bireylerin fonksiyonel gelir dağılımından aldığı gelir türünü çeşitlendirmektedir. Bu iki unsurun tabana yayılması durumda fonksiyonel gelir dağılımındaki eşitsizlik, bireylerarası gelir dağılımını daha az etkileyecek ve bireylerin gelirlerindeki çeşitlilik toplumsal barışa katkı sağlayacaktır. Çalışma kapsamında gelir dağılımı ve servet dağılımı arasındaki ayrıma vurgu yapılmıştır. Akım bir değişken olan gelir dağılımı ve stok bir değişken olan servet dağılımı arasındaki ilişki sayısal olarak açıklanmıştır. Çalışmanın teorik söylemini sınamak için 2003-2018 dönemini kapsayan 15 ülkenin yıllık frekanslı verileri kullanılarak panel veri analizi yapılmıştır. Yapılan analizde mülkiyet ve sermayenin tabana yayılmasını temsilen, ülkelerin borsalarında işlem gören halka arz olmuş hisselerin piyasa değerinin hasılaya oranı kullanılmıştır. Elde edilen sonuçlara göre borsada işlem gören halka açık hisse senetlerinin oranı arttıkça gelir dağılımı iyileşmekte, diğer bir deyişle GINI katsayısı düşmektedir. Bu sonucun Türkiye ekonomisinde daha yoğun olduğu, kullanılan kukla değişkenler ile tespit edilmiştir. Modelde kontrol değişkeni olarak kullanılan tüketim oranındaki artışlar ise gelir dağılımını bozmaktadır.Çalışma; ulaştığı sonuçlar, yaptığı tespitler ve sunduğu politika önerileriyle literatürde önemli bir boşluğu dolduracaktır.

JEL Classification : D30 , E20 , G32 , G51

EXTENDED ABSTRACT


The superiority of liberal and neoliberal understanding regarding national and global economic policies, as well as hyper-globalization and its effects, have brought the issue of income distribution to a highly debatable position. This study examines the relationship between economic income distribution as a trend variable and wealth distribution as a stock variable, as well as the effect of ownership and capital ownership on income distribution. The market values of companies publicly traded on countries’ stock exchanges are used to represent the spread of capital and property ownership to the base. The study explains within its scope the concepts of capital markets, public offerings, the spread of capital and property to the base, income distribution, wealth distribution, and class struggle and evaluates the relationships among them. This study proposes the use of wealth distribution instead of income distribution in income distribution studies as a trend indicator. In order to support this proposal, the study examines the differences and relationships between income distribution and wealth distribution and explains them using numerical models.

The increase in competitive conditions through globalization have created an important capital need for businesses that want to increase their sustainable competitiveness by benefitting from positive scale economies. The pressures that emerged in the demand for funds due to these enterprises’ capital needs have made borrowing difficult, with methods for incorporating small investors’ savings into the working capital through partnership relations having come to the fore. This step from enterprises is known as a public offering and involves the savings of smaller savers in production; it has emerged as a method that provides resources to businesses without creating debt obligations. The development and widespread use of information and communication technologies through globalization as well as the increase in measures to protect small investors has seen participation from small investors increase with regard to public offerings, and these public offerings have become an important resource for companies. Inn addition to public offerings, the spread of capital or equity ownership, which represents the partnership rights in companies, to the base and the results from this are important issues that need to be examined. This study examines within its scope the effect that the increase in public offerings have on income distribution. As a result of the examination and econometric analysis, significant relations have been identified between income distribution and the market values of the companies traded in stock exchanges, which represents the spread of capital ownership to the base.

The study has established relationships among the concepts of public offerings, spread of property to the base, income distribution, and class struggle. The relationships among these variables have not received the attention they require in the literature. This study will fill important gaps in the literature through the causality relationship it has established between income and wealth distribution as well as the answers it provides regarding the effect of wealth ownership on income distribution and the new questions it brings to these issues.

According to this study, the spread of capital ownership to the base equalizes income distribution. Again, the spread of capital ownership to the base will reduce the destructive effects of crises that arise in the labor or money markets, as this spread will diversify the types of income that individuals receive from the functional income distribution. For example, in the event of a sudden lack of demand for labor and an increase in unemployment due to changes in production techniques or other reasons, the labor supplier whose labor income has decreased or been completely reset will be able to continue to earn income from other production resources. Therefore, having individuals diversify their production resources will reduce the destructive effects in factor markets. In addition, individuals who engage in economic activity receive a share of the income of all production resources, and this minimizes the class struggle and conflicts of interest that arise with respect to the economic division of labor. In other words, because the labor supplier will also own capital, no significant loss will be experienced in total income when capital takes up a larger share of production. For this reason, the conflicts of interest between classes that are sharply seen will lose their effect, and social peace will increase.

The results obtained from the study show the equal distribution of wealth ownership to be an important factor able to create the necessary climate for ensuring equality with regard to individuals’ current income levels. The econometric analysis yielded meaningful results that support the study’s theoretical discourse. According to these results, an increase in the ratio of the market values of stocks traded in the stock market to GDP results in a decrease of the Gini coefficient; in other words, it ensures a more equal distribution of income. This situation is more evident in the Republic of Turkey compared to the other 14 countries whose data were used. An increase in publicly traded stocks’ market value share in the GDP causes income distribution to become more equal and income inequality to decrease.


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APA

Daşdemir, E., & Tunalı, H. (2023). The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution. Istanbul Journal of Economics, 73(1), 533-555. https://doi.org/10.26650/ISTJECON2022-1058516


AMA

Daşdemir E, Tunalı H. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution. Istanbul Journal of Economics. 2023;73(1):533-555. https://doi.org/10.26650/ISTJECON2022-1058516


ABNT

Daşdemir, E.; Tunalı, H. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution. Istanbul Journal of Economics, [Publisher Location], v. 73, n. 1, p. 533-555, 2023.


Chicago: Author-Date Style

Daşdemir, Esat, and Halil Tunalı. 2023. “The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution.” Istanbul Journal of Economics 73, no. 1: 533-555. https://doi.org/10.26650/ISTJECON2022-1058516


Chicago: Humanities Style

Daşdemir, Esat, and Halil Tunalı. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution.” Istanbul Journal of Economics 73, no. 1 (Mar. 2024): 533-555. https://doi.org/10.26650/ISTJECON2022-1058516


Harvard: Australian Style

Daşdemir, E & Tunalı, H 2023, 'The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution', Istanbul Journal of Economics, vol. 73, no. 1, pp. 533-555, viewed 2 Mar. 2024, https://doi.org/10.26650/ISTJECON2022-1058516


Harvard: Author-Date Style

Daşdemir, E. and Tunalı, H. (2023) ‘The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution’, Istanbul Journal of Economics, 73(1), pp. 533-555. https://doi.org/10.26650/ISTJECON2022-1058516 (2 Mar. 2024).


MLA

Daşdemir, Esat, and Halil Tunalı. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution.” Istanbul Journal of Economics, vol. 73, no. 1, 2023, pp. 533-555. [Database Container], https://doi.org/10.26650/ISTJECON2022-1058516


Vancouver

Daşdemir E, Tunalı H. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution. Istanbul Journal of Economics [Internet]. 2 Mar. 2024 [cited 2 Mar. 2024];73(1):533-555. Available from: https://doi.org/10.26650/ISTJECON2022-1058516 doi: 10.26650/ISTJECON2022-1058516


ISNAD

Daşdemir, Esat - Tunalı, Halil. The Effect of Capital Ownership and Ownership Spread on Economic Income Distribution”. Istanbul Journal of Economics 73/1 (Mar. 2024): 533-555. https://doi.org/10.26650/ISTJECON2022-1058516



TIMELINE


Submitted18.01.2022
Accepted06.04.2022
Published Online26.06.2023

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