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The Nexus Between ICT Diffusion and Income Disparity: Insights from Post-soviet Economies

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  • M. Mesut Badur

    (Graduate School of Economics and Management, Ural Federal University)

  • Kazi Sohag

    (Graduate School of Economics and Management, Ural Federal University)

Abstract

The speed of adaption and integration of ICTs has particular implications for the distributional aspect of the economy. We investigate the dynamic impact of ICT diffusion on income inequality in post-Soviet countries. By applying a cross-sectional autoregressive distributed lag (CS-ARDL) approach, we analyze panel data due to cross-sectional dependency and mixed order of integration of our variables. Our empirical investigation reveals a statistically significant long-term relationship between the diffusion of ICTs and income inequality, characterizing it with a discernible negative trajectory. However, our analysis simultaneously reveals an insignificant impact of ICT diffusion on income inequality in the short term, indicating that individuals and businesses require time to develop the necessary skills and knowledge to utilize ICTs effectively. Furthermore, the study delineates the counterproductive income inequality in the former Soviet countries’ nature of governmental austerity measures vis-à-vis long-term income equality objectives, due to proportional or regressive taxation policies. Policy implications enclose the significance of designing policies that foster digital inclusion to reduce income inequality in post-Soviet countries.

Suggested Citation

  • M. Mesut Badur & Kazi Sohag, 2025. "The Nexus Between ICT Diffusion and Income Disparity: Insights from Post-soviet Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(2), pages 9365-9380, June.
    • Handle: RePEc:spr:jknowl:v:16:y:2025:i:2:d:10.1007_s13132-024-02220-4
    DOI: 10.1007/s13132-024-02220-4
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    Keywords

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    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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