Innovation and Poverty-Related Income Gaps in Europe: Evidence from the North-South Divide

This article examines how innovation dynamics interact with income inequality and poverty-related vulnerability across European countries, with attention to the persistent North - South divide. Using harmonized data from Eurostat and the Global Entrepreneurship Monitor, income inequality is measured through the S80/S20 income quintile share ratio, an indicator sensitive to disparities affecting lower-income groups. The analysis combines descriptive evidence with fixed-effects panel models and Bayesian hierarchical estimation to assess within-country dynamics over time. Results show that innovation-driven growth does not automatically lead to inclusive outcomes, and that its distributive effects depend on labor market structures, skill composition, and social protection systems.