A cross-country empirical test of cognitive abilities and innovation nexus

Abstract

A B S T R A C TIn this study we analyze the relationship between national cognitive abilities and innovational output using data from 124 countries of the world. By employing cross-country IQ scores traditionally used by psychological literature to represent national intelligence, and Economic Complexity Index as a novel measure of innovation, our study shows that there is a positive connection between them. We use a variety of tests to check the robustness of the nexus. Overall, our findings indicate that more intelligent nations export more sophisticated and diverse products to the world market and thus are more innovative. Therefore, developing countries should consider investing in human capital and related institutions if they are to boost innovative capabilities and move up the technology ladder in producing and exporting sophisticated and varied lines of products. This should bring them greater economic diversity which could be a right lever in mitigating negative external shocks.

Does foreign direct investment expand the capability set in the host economy? A sectoral analysis

“…The effect of hc on the number of capabilities is by far the largest one. This result is plausible and consistent with the literature on the importance of knowledge in the process of economic development (Azam, ; Hanushek & Woessmann, ). The effect of FDI ter is about half as big as that of hc , which still is considerably large and emphasises the importance of acquiring foreign capabilities.…”

“…Obviously, human capital is a good predictors of the number of capabilities since more complex tasks require more knowledge and know‐how. Azam (), for instance, shows that cognitive skills positively affect economic complexity. Also, a sound institutional environment matters for accumulating capabilities.…”

Cognitive Enhancement and Network Effects: how Individual Prosperity Depends on Group Traits

“…The skills of our neighbors influence the tasks our economy can take on: this finding is backed up by recent studies showing that countries with higher average IQs have higher levels of economic complexity as proxied by Ricardo Hausmann's new Economic Complexity Index (Azam, 2017). Unsurprisingly, this correlation survives a variety of controls for possible confounds.…”

Экономическая Сложность На Субнациональном Уровне - Инновационная Парадигма Регионального Развития

“…К недостаткам таких баз данных международной торговли, относится то, что они содержат информацию лишь об экспорте товаров, услуги в них, как правило, не включены, к тому же не учитываются продукты, в том числе инновационные, производимые в странах, но присутствующие лишь на внутренних рынках [17] . К проблемам баз данных экономической торговли относят также тот факт, что в условиях существования глобальных цепочек они не способны отразить реальный вклад страны в создание ценности и добавленной стоимости [2, 18,19].…”