The spillover effects of top-income inequality on innovation

The spillover effects of top-income inequality on innovation | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article The spillover effects of top-income inequality on innovation Cristiano Antonelli, Guido Pialli, Matteo Tubiana This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-4713099/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract The existing literature has widely explored the impact of technological change on income inequality. The reverse relationship – from income inequality to innovation – has received considerably less attention. This paper contributes to fill this gap by advancing and testing the hypothesis that higher levels of top-income inequality enhance innovation and entrepreneurship. Our empirical analysis confirms that top-income inequality increases the formation of new establishments and startups across USA cities over the past two decades. Moreover, higher top-income inequality is associated with a greater proportion of new high-tech and high-growth firms. We support these findings by showing that households in the top-tail of the income distribution keep larger shares of risk assets, exhibit a greater propensity to save, and display higher levels of propensity to risk. JEL classification: D31, D63, G24, L26, O33. Top Income Inequality Innovation High-Tech Entrepreneurship Propensity to Risk Equity Capital Pareto Distribution Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-4713099","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":333083165,"identity":"1b0f0393-8b29-4327-8a7e-ae7e2ab7caa2","order_by":0,"name":"Cristiano Antonelli","email":"","orcid":"","institution":"University of Torino","correspondingAuthor":false,"prefix":"","firstName":"Cristiano","middleName":"","lastName":"Antonelli","suffix":""},{"id":333083168,"identity":"e4c94229-620a-40da-9873-defb559e3321","order_by":1,"name":"Guido Pialli","email":"","orcid":"","institution":"University College London","correspondingAuthor":false,"prefix":"","firstName":"Guido","middleName":"","lastName":"Pialli","suffix":""},{"id":333083171,"identity":"74304c75-8eb3-43ed-b234-8f901324be2b","order_by":2,"name":"Matteo Tubiana","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA80lEQVRIiWNgGAWjYFADCcYGIGnDwMAOZkjgUcoMVQHRkgYSaASyJPDogWsB8w4DBRjwW6Pbfv74gw8VDHUGt5sbPxfUnM/jZ2Zuf/CBwaIOlxazM8mMjTPOMEgY3DnYLD3j2O1iyWbGxsYZeBxmdiCZsZm3DajlRmKDNA/b7cQNhxkbm3nwaTn/mLH5L0RL82+ef+eI0HIDaAsjREubNG/bAWK0PDac2XNGQnLmnYNt1rx9yWC/zJxhICHZgNNhiQ8+/Kiw4ee73f74Ns83uzx+dmCAfaio48dlCxQgXJEAoQwIaEAGCSSoHQWjYBSMghECAHmXVxl6MXnyAAAAAElFTkSuQmCC","orcid":"","institution":"Politecnico di Torino","correspondingAuthor":true,"prefix":"","firstName":"Matteo","middleName":"","lastName":"Tubiana","suffix":""}],"badges":[],"createdAt":"2024-07-09 15:18:05","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-4713099/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-4713099/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":73260940,"identity":"27cccf3a-2e3d-4a5f-ba52-724653440bac","added_by":"auto","created_at":"2025-01-08 09:24:35","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":718689,"visible":true,"origin":"","legend":"","description":"","filename":"APT1submission.pdf","url":"https://assets-eu.researchsquare.com/files/rs-4713099/v1_covered_2c87eac4-9cba-4ad0-878a-f98f055834c9.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"The spillover effects of top-income inequality on innovation","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Top Income Inequality, Innovation, High-Tech Entrepreneurship, Propensity to Risk, Equity Capital, Pareto Distribution","lastPublishedDoi":"10.21203/rs.3.rs-4713099/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-4713099/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eThe existing literature has widely explored the impact of technological change on income inequality. 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