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An Empirical Analysis of the Relationship Between Inequality and Innovation in a Schumpeterian Framework

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Hatipoglu, Ozan

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Abstract

I empirically investigate the non-linear relationship between inequality and innovation in a Schumpeterian setup where growth is expressed by the rate of innovations. In this framework income distribution plays a role in determining the dynamic market sizes for innovators and therefore is a major determinant of growth. By using two new cross-country inequality data sets, I find support for an inverted U-shaped relationship between inequality and innovative activities. This result is robust to two common inequality definitions and several parametric and non-parametric estimation procedures.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 7856.

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Date of creation: 20 Mar 2008
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Handle: RePEc:pra:mprapa:7856

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Keywords: inequality innovation patents

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Find related papers by JEL classification:
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives

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