Economic Complexity and Income Inequality in Sub-Saharan Africa
摘要
The objective of this article is to analyze the influence of economic complexity on income inequality in Sub-Saharan African countries. Methodologically, two approaches are used, a fixed effects model and a quantile regression, on a sample of 20 sub-Saharan African countries for the period 2000–2019. The results of the fixed effects model show that economic complexity increases income inequality. However, this effect is less pronounced with movement up the distribution, i.e., in the 75th and 90th quantiles. The contribution of economic complexity to the rise in income inequality diminishes in the upper quantiles (75th and 90th). In the first stages of development, economic complexity (lower quantile) increases income inequality. At high levels (upper quantile), the effect is reduced. Hence the importance of participation in trade and increased productivity in reducing income inequality. Foreign direct investment flows reduce income inequality. High transportation costs are a source of income inequality. These results are the same regardless of the methodological approach used. These results indicate that the current level of economic complexity in African economies exacerbates income inequality. Two coordinated actions, raising the level of economic complexity through investment in education and innovation, and ratifying continental trade policies (such as the African Continental Free Trade Area) to increase trade activity. could help African countries capitalize on economic complexity.