Open Access Journal Article

The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones

by Han Xue a,*
a
School of Political Science and Public Administration, Henan Normal University, Xinxiang, China
*
Author to whom correspondence should be addressed.
REA  2025 4(1):43; https://doi.org/10.58567/rea04010001
Received: 21 December 2024 / Accepted: 26 January 2025 / Published Online: 12 March 2025
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Abstract

This study investigates the effects of innovation reform on wealth inequality by analyzing China’s Comprehensive Innovation Reform Pilot Zones (CIRPZs). Employing a difference-in-differences methodology, we assess the impact of CIRPZs on urban wealth distribution among China’s prefecture-level cities. Our findings reveal a paradox: although CIRPZs are designed to stimulate economic growth and technological advancement, they inadvertently exacerbate wealth inequality. This outcome is confirmed through a series of rigorous robustness checks. We identify two key mechanisms driving this phenomenon: the virtual wealth effect, whereby technological progress disproportionately benefits tech-savvy individuals and firms, and wage stratification, leading to increased income disparities within innovative sectors. Additionally, we find that the impacts of CIRPZs vary across regions, with significant widening of wealth inequality observed in Beijing-Tianjin-Hebei, the middle reaches of the Yangtze River, and Chengdu-Chongqing, while a moderating effect is noted in the Central Plains. These insights emphasize the nuanced effectiveness of innovation reform policies and their implications for policymakers in developing economies. We advocate for policy frameworks that balance technological advancement with equitable economic outcomes, a crucial step for fostering sustainable and inclusive development.

Keywords: Innovation Reform; Wealth Inequality; Urban Distribution; Economic Growth; Policy Analysis;
Copyright: © 2025 by Xue. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
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APA Style
Xue, H. (2025). The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment, 4(1), 43. doi:10.58567/rea04010001
ACS Style
Xue, H. The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment, 2025, 4, 43. doi:10.58567/rea04010001
AMA Style
Xue H. The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment; 2025, 4(1):43. doi:10.58567/rea04010001
Chicago/Turabian Style
Xue, Han 2025. "The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones" Review of Economic Assessment 4, no.1:43. doi:10.58567/rea04010001

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ACS Style
Xue, H. The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment, 2025, 4, 43. doi:10.58567/rea04010001
AMA Style
Xue H. The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment; 2025, 4(1):43. doi:10.58567/rea04010001
Chicago/Turabian Style
Xue, Han 2025. "The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones" Review of Economic Assessment 4, no.1:43. doi:10.58567/rea04010001
APA style
Xue, H. (2025). The Impact of Innovation Reform on Wealth Inequality: Evidence from Comprehensive Innovation Reform Pilot Zones. Review of Economic Assessment, 4(1), 43. doi:10.58567/rea04010001

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