Can innovation improve income inequality? evidence from panel data
Income inequality is a source of social instability and armed conflict, which in turn are detrimental to economic development. This study examines the role of innovation in income inequality in twenty-three developed countries, using a panel mean group estimator that takes cross-sectional dependence...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2020
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| Online Access: | http://psasir.upm.edu.my/id/eprint/88077/ http://psasir.upm.edu.my/id/eprint/88077/1/ABSTRACT.pdf |
| _version_ | 1848860549131010048 |
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| author | Law, Siong Hook Niaz Ahmad, Mohd Naseem Lau, Wei Theng Trinugroho, Irwan |
| author_facet | Law, Siong Hook Niaz Ahmad, Mohd Naseem Lau, Wei Theng Trinugroho, Irwan |
| author_sort | Law, Siong Hook |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | Income inequality is a source of social instability and armed conflict, which in turn are detrimental to economic development. This study examines the role of innovation in income inequality in twenty-three developed countries, using a panel mean group estimator that takes cross-sectional dependence into consideration. Three income inequality indicators are used: the Standardized World Income Inequality Database (SWIID), the University of Texas Inequality Project (UTIP), and the Estimated Household Income Inequality (EHII). The innovation indicators are patent applications and patents granted. The empirical results based on the common correlated effect mean group (CCEMG) reveal that innovation widens income inequality. We also investigate whether the innovation–income inequality nexus is subject to a country’s level of globalization and financial development. The findings suggest that the interaction terms between innovation with these two variables have positive effects on income inequality, whereas innovation failed to reduce income inequality. Globalization and financial development are found to drive income inequality. The empirical results are robust to different income inequality and innovation measures as well as estimation techniques. |
| first_indexed | 2025-11-15T12:47:00Z |
| format | Article |
| id | upm-88077 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T12:47:00Z |
| publishDate | 2020 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-880772022-05-18T04:04:59Z http://psasir.upm.edu.my/id/eprint/88077/ Can innovation improve income inequality? evidence from panel data Law, Siong Hook Niaz Ahmad, Mohd Naseem Lau, Wei Theng Trinugroho, Irwan Income inequality is a source of social instability and armed conflict, which in turn are detrimental to economic development. This study examines the role of innovation in income inequality in twenty-three developed countries, using a panel mean group estimator that takes cross-sectional dependence into consideration. Three income inequality indicators are used: the Standardized World Income Inequality Database (SWIID), the University of Texas Inequality Project (UTIP), and the Estimated Household Income Inequality (EHII). The innovation indicators are patent applications and patents granted. The empirical results based on the common correlated effect mean group (CCEMG) reveal that innovation widens income inequality. We also investigate whether the innovation–income inequality nexus is subject to a country’s level of globalization and financial development. The findings suggest that the interaction terms between innovation with these two variables have positive effects on income inequality, whereas innovation failed to reduce income inequality. Globalization and financial development are found to drive income inequality. The empirical results are robust to different income inequality and innovation measures as well as estimation techniques. Elsevier 2020 Article PeerReviewed text en http://psasir.upm.edu.my/id/eprint/88077/1/ABSTRACT.pdf Law, Siong Hook and Niaz Ahmad, Mohd Naseem and Lau, Wei Theng and Trinugroho, Irwan (2020) Can innovation improve income inequality? evidence from panel data. Economic Systems, 44 (4). art. no. 100815. pp. 1-18. ISSN 0939-3625 https://www.sciencedirect.com/science/article/pii/S0939362518305144 10.1016/j.ecosys.2020.100815 |
| spellingShingle | Law, Siong Hook Niaz Ahmad, Mohd Naseem Lau, Wei Theng Trinugroho, Irwan Can innovation improve income inequality? evidence from panel data |
| title | Can innovation improve income inequality? evidence from panel data |
| title_full | Can innovation improve income inequality? evidence from panel data |
| title_fullStr | Can innovation improve income inequality? evidence from panel data |
| title_full_unstemmed | Can innovation improve income inequality? evidence from panel data |
| title_short | Can innovation improve income inequality? evidence from panel data |
| title_sort | can innovation improve income inequality? evidence from panel data |
| url | http://psasir.upm.edu.my/id/eprint/88077/ http://psasir.upm.edu.my/id/eprint/88077/ http://psasir.upm.edu.my/id/eprint/88077/ http://psasir.upm.edu.my/id/eprint/88077/1/ABSTRACT.pdf |