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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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  • Maksim, Kostiulin

    (Yonsei University, Republic of Korea)

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.

Suggested Citation

  • Maksim, Kostiulin, 2024. "The Nonlinear Relationship Between Technological Development and Income Inequality: Evidence from Dynamic Panel Model with Threshold Effect," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 49(3), pages 33-61, September.
    • Handle: RePEc:ris:jecdev:0092
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    References listed on IDEAS

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    More about this item

    Keywords

    Nonlinearity; Dynamic Panel; Threshold Effects; Income Inequality; Innovation;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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