Innovation, Economic Growth, and Inequalities: A Panel Dynamic Threshold Analysis for Dynamic Economies

This study reinforces the minimal empirical work on the nonlinear relationship between innovative activities, economic growth, and income distribution. Meanwhile, this study assesses panel data of 40 developing economies from 1996 to 2020, wielding the newly developed threshold model by Seo and Shin (2016). Firstly, the empirical findings hold that there exists a nonlinear relationship between the variables. So, by regressing Innovation on economic growth, this study acquires a threshold value of 0.36% of R&D. Hence, indicating above the threshold value of 0.36, the economic growth will revamp. Secondly, regressing R&D on GINI, this study obtains a threshold value of 0.27% of R&D. So, above the threshold value of 0.25, the income inequality will topple down. In contrast, below the threshold level of Innovation will cause both economic growth and income inequality to exacerbate. All in all, the empirical findings of this study suggest that it is plausible to argue that governments and policymakers in developing economies should lavish more on Innovation because higher innovation activities result in inclusive growth.

• Publication year

  2023

• Venue

  Annals of Financial Economics

• Publication date

  2023-05-10

• Fields of study

  Not labeled

• Identifiers
  DOI 10.1142/s2010495223500045
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

• No references are available for this paper.

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