Innovation and wage inequality in Argentinean manufacturing firms

Abstract

Latin American economies are increasingly applying the neo-Schumpeterian approach to innovation when seeking to address development problems. However, although inequality is particularly critical in the region, the topic of inequality is curiously absent from studies which adopt the neo-Schumpeterian approach. Applying the efficiency wage hypothesis, this article examines the relationship between innovation efforts and wage inequality among Argentinean firms, employing a quantile regressions methodology on firm-level wages with data from the National Survey of Employment and Innovation Dynamics (ENDEI) for 2010-2012. The results are articulated with a sectoral analysis as a conditioning factor of the relationship studied, revealing the intense and enduring techno-productive imbalances characteristic in the region.