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Economic complexity, human capital and income inequality: a cross-country analysis

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journal contribution
posted on 2022-10-19, 07:43 authored by Kang-Kook Lee, Trung V VuTrung V Vu

This paper investigates the relationship between economic complexity, a measure of economic structures, and income inequality. Using cross-country OLS regression analysis, we show that countries with economic structures geared toward complex products have less inequality. Human capital is found to magnify this correlation but with subtle interaction effects. Concerns about endogeneity bias in the OLS estimates stemming from reverse causality motivate us to estimate a dynamic panel data model, using a system GMM estimator. From the system GMM estimates we find that an increase in economic complexity provokes higher inequality, not less. 

Funding

Japanese Government

History

School

  • Business and Economics

Department

  • Economics

Published in

The Japanese Economic Review

Volume

71

Issue

4

Pages

695 - 718

Publisher

Springer

Version

  • AM (Accepted Manuscript)

Rights holder

© Japanese Economic Association

Publisher statement

This version of the article has been accepted for publication, after peer review (when applicable) and is subject to Springer Nature’s AM terms of use, but is not the Version of Record and does not reflect post-acceptance improvements, or any corrections. The Version of Record is available online at: https://doi.org/10.1007/s42973-019-00026-7

Acceptance date

2019-08-01

Publication date

2019-12-10

Copyright date

2019

ISSN

1352-4739

eISSN

1468-5876

Language

  • en

Depositor

Dr Van Trung Vu. Deposit date: 16 October 2022

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