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Can Innovation Stimulate Income Inequality in South Asia?

Author

Listed:
  • Abdul Rehman Nawaz

    (Institute of Development and Economic Alternatives (IDEAS), Pakistan)

  • Hafiz Ghulam Mujaddad

    (School of Economics, University of the Punjab, Pakistan)

Abstract

Income inequality can jeopardize social cohesiveness, stifle economic growth, trigger a recession, and slow the rate of economic development. It may also cause social unrest and dispute, which are the determinants of economic growth. The Schumpeterian growth hypothesis is tested by employing the quantile regression to examine the role of innovation in determining income inequality for the selected South Asian countries. The empirical findings show that innovation, especially the number of patent applications, has a statistically significant and positive association with income inequality in South Asia which increases income inequality. For sustainable economic growth, everyone must be given equal economic opportunities in the economy, and the government must abolish capitalists’ oligopoly on wealth. Similarly, everyone must be given equal opportunities to innovate because innovation encourages not only productivity but also economic growth in the long run.

Suggested Citation

  • Abdul Rehman Nawaz & Hafiz Ghulam Mujaddad, 2024. "Can Innovation Stimulate Income Inequality in South Asia?," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 2, pages 360-383, June.
    • Handle: RePEc:nwe:eajour:y:2024:i:2:p:360-383
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    More about this item

    Keywords

    globalization; unemployment; patents; governance; inflation; corruption;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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