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Does Innovation Drive Up Income Inequality in Africa?

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Abstract

This study empirically analyzes, for the first time in Africa, the impact of innovation on income inequality over the period of 2000–2021. Three main results emerge: first, innovation is positively and significantly associated with income inequality at a threshold of 1%. Second, access to electricity, trade openness, CO2 emissions, and natural resource rents significantly reduce income inequality, while the opposite effect is observed for government consumption expenditure. Third, the results reveal a non-linear, inverted U-shaped relationship between innovation and income inequality. This suggests that there is a threshold above which innovation becomes a factor in reducing income inequality in Africa. In any case, it is incumbent upon African countries to consider innovation not only as a critical factor in the economic development of nations, but also as a potential vector for widening the income gap between individuals. A key recommendation would be to develop policies for the appropriation and absorption of innovation on the continent.

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Data will be made available on request.

Notes

  1. Indeed, the Gini index alone, for example, is not entirely satisfactory (the Gini coefficient may decrease while the number of poor people increases) (see related discussions in Sitthiyot & Holasut, 2020). Consequently, for the country-level analysis, we introduce two additional measures of income inequality to ensure that the results are robust.

  2. Specifically, this is reflected in SDG 10.1 "Reduce income inequality" and SDG 9 "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation".

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Acknowledgements

The authors are grateful to the Editor-in-Chief of the Journal of the Knowledge Economy for his confidence in this paper. We are also grateful to the three anonymous reviewers whose comments and suggestions substantially improved the early version of this paper.

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Authors and Affiliations

  1. CEREG, ACEDA, University of Yaoundé, 2-Soa, Soa, Cameroon

    Emmanuel Bruno Nkoa Ongo

  2. Dschang School of Economics and Management, ACEDA, LAREFA, University of Dschang, Dschang, Cameroon

    Fabrice Ewolo Bitoto, Blaise Beyene Ondoua & Cérapis Nchinda Mbognou

  3. Dschang School of Economics and Management, LAREFA, Dschang, Cameroon

    Cérapis Nchinda Mbognou

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  1. Emmanuel Bruno Nkoa Ongo
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Contributions

BENO: supervision, project administration, investigation, visualisation, and validation; FEB: conceptualization, methodology, visualization, data curation, software, investigation, writing—original draft and editing; BBO: conceptualization, visualization, investigation, writing—original draft and editing. CNM: visualization, investigation, writing—original draft and editing.

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Correspondence to Fabrice Ewolo Bitoto.

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Appendix

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Table 8 List of sample countries
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Table 9 Description and source of variables
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Ongo, E.B.N., Bitoto, F.E., Ondoua, B.B. et al. Does Innovation Drive Up Income Inequality in Africa?. J Knowl Econ (2024). https://doi.org/10.1007/s13132-023-01647-5

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