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

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  • Ozan Hatipoglu
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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  • Ozan Hatipoglu, 2007. "An Empirical Analysis of the Relationship Between Inequality and Innovation in a Schumpeterian Framework," Working Papers 2007/10, Bogazici University, Department of Economics.
    • Handle: RePEc:bou:wpaper:2007/10
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    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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