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Economic complexity, scientific productivity and income inequality in developing economies

Author

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  • Hamid Sepehrdoust
  • Mohsen Tartar
  • Aliakbar Gholizadeh

Abstract

The state of income distribution in developing countries is important from an economic perspective, including per capita income, national savings, society's welfare and a socio‐political perspective for governments to attract public voters. Therefore, economic justice has always been a concern of governments because of its undeniable economic and social consequences. The purpose of this study was to examine the impact of macroeconomic variables such as economic complexity, scientific productivity and various economic, financial and political risks on the situation of income inequality in developing economies during the years 2000–2019, using an econometric Panel‐VAR method. The results showed that income inequality in selected middle‐income developing countries is moving towards better status due to an increase in scientific productivity and a reduction in economic, financial and political risks. While income inequality decreases as economic complexity increases above a certain threshold. The results of the analysis of variance decomposition showed that among the explanatory variables, the economic complexity has the largest share in describing the Gini coefficient as the index of income inequality distribution.

Suggested Citation

  • Hamid Sepehrdoust & Mohsen Tartar & Aliakbar Gholizadeh, 2022. "Economic complexity, scientific productivity and income inequality in developing economies," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(4), pages 737-752, October.
    • Handle: RePEc:wly:ectrin:v:30:y:2022:i:4:p:737-752
    DOI: 10.1111/ecot.12309
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