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

  • Hatipoglu, Ozan

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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  1. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
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  27. repec:fth:harver:1473 is not listed on IDEAS
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