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The Nonlinear Relationship Between Technological Development and Income Inequality: Evidence from Dynamic Panel Model with Threshold Effect

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초록

This study revisits the innovation-inequality nexus and tests the technological Kuznets curve hypothesis suggesting that technology can induce or reduce inequalities depending on the level of technological development. Applying a recently developed dynamic panel model with endogeneity and threshold effects to a panel of 72 countries, I find a significant U-shaped curvilinear relationship between innovation and income inequality which is robust to different measures of innovations and a different estimation technique. Furthermore, it was shown that achieving a certain level of technological development can change how economic growth and financial development affect income inequality.

Abstract

This study revisits the innovation-inequality nexus and tests the technological Kuznets curve hypothesis suggesting that technology can induce or reduce inequalities depending on the level of technological development. Applying a recently developed dynamic panel model with endogeneity and threshold effects to a panel of 72 countries, I find a significant U-shaped curvilinear relationship between innovation and income inequality which is robust to different measures of innovations and a different estimation technique. Furthermore, it was shown that achieving a certain level of technological development can change how economic growth and financial development affect income inequality.

참고문헌 (63)

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