Can Innovation Stimulate Income Inequality in South Asia?

Abdul Rehman Nawaz and Hafiz Ghulam Mujaddad
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Abdul Rehman Nawaz: Institute of Development and Economic Alternatives (IDEAS), Pakistan
Hafiz Ghulam Mujaddad: School of Economics, University of the Punjab, Pakistan

Economic Alternatives, 2024, issue 2, 360-383

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.

Keywords: globalization; unemployment; patents; governance; inflation; corruption (search for similar items in EconPapers)
JEL-codes: E03 O1 O3 (search for similar items in EconPapers)
Date: 2024
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