Green innovation and income inequality: A complex system analysis

Lorenzo Napolitano; Angelica Sbardella; Davide Consoli; Nicolò Barbieri; François Perruchas

doi:10.1016/j.strueco.2022.09.007

Green innovation and income inequality: A complex system analysis

Struct Chang Econ Dyn. 2022 Dec:63:224-240. doi: 10.1016/j.strueco.2022.09.007.

Authors

Lorenzo Napolitano¹, Angelica Sbardella^{2

3}, Davide Consoli⁴, Nicolò Barbieri^{5

6}, François Perruchas⁴

Affiliations

¹ European Commission Joint Research Centre (JRC-Seville), Seville, Spain.
² Enrico Fermi Center, Rome, Italy.
³ SOAS University of London, London, UK.
⁴ INGENIO (CSIC-UPV), Universitat Politècnica de València, Spain.
⁵ Department of Economics and Management, University of Ferrara, Italy.
⁶ SEEDS - Sustainability, Environmental Economics and Dynamics Studies, Italy.

Abstract

The objective of this paper is to analyse the relationship between income inequality and environmental innovation. To this end, we use the Economic Fitness and Complexity algorithm to compute an index of green inventive capacity in a panel of 57 countries over the period 1970-2010. The empirical analysis reveals that, on average, inequality is detrimental to countries' capacity to develop complex green technologies. Using non-parametric methods we further articulate this general finding and uncover interesting non-linearities in the relationship between innovation and inequality.

Keywords: Economic fitness and complexity; Environmental innovation; Income inequality.