Information and communication technology (ICT) is one of the development strategies in the globalization era. The motivation of this study is to provide empirical evidence on relationships between financial development, income gap and ICT diffusion. The theory suggests that financial development and ICT diffusion are seen to reduce the income gap but empirical evidence shows diverse results. Therefore, this study aims to analyze the interaction between financial development and ICT to test whether the impact of financial development on the income gap is strengthened by the availability of good ICT infrastructure or vice versa. This study is based on estimation of a dynamic panel model with system GMM estimators for 69 countries from 1980-2014. The findings show that the impact of interaction between financial development and ICT diffusion is positive and significant. This illustrates that the impact of interaction between financial and ICT development is inadequate in reducing the income gap. Meanwhile, financial development as well as advances in ICT is an important factor for economic development. Hence, the need for other factors such as skilled in human resource development should also be taken into account to ensure that financial development and ICT advancement are beneficial in reducing the imbalance of income distribution.<\/p>\n","protected":false},"template":"","tags":[710,743,193],"jel-code":[],"article-type":[1329],"class_list":["entry","author-jem","post-3434","article","type-article","status-publish","tag-financial-development","tag-ict-and-dynamic-panel","tag-income-inequality","article-type-normal-article"],"yoast_head":"\n