Does innovation promote economic growth? Evidence from European countries

Abstract

The paper examines the long-run relationship between innovation and per capita economic growth in the 19 European countries over the period 1989-2014. This study uses six different indicators of innovation: patents-residents, patents-nonresidents, research and development expenditure, researchers in research and development activities, high-technology exports, and scientific and technical journal articles to examine this long-run relationship with per capita economic growth. Using cointegration technique, the study finds evidence of long-run relationship between innovation and per capita economic growth in most of the cases, typically with reference to the use of a particular innovation indicator. Using Granger causality test, the study finds the presence of both unidirectional and bidirectional causality between innovation and per capita economic growth. These results vary from country to country, depending upon the types of innovation indicators that we use in the empirical investigation process. Most importantly, the study finds that all these innovation indicators are considerably linked with per capita economic growth. This particular linkage is either supply-leading or demand-following in some occasions, while it is the occurrence of both in some other occasions. The policy implication of this study is that countries should recognize the differences in innovation and per capita economic growth in order to maintain sustainable development in these countries.

R&D expenditures by field of science and GDP: Which causes which in Canada?

“…The first finding points to a unidirectional causality from GDP per capita to R&D expenditure per capita. This result is compatible with the results of Maradana et al (2017); Bozkurt (2015); Çetin (2013); and Güloğlu and Tekin (2012). It is particularly in harmony with Ntuli et al (2015) whose results show causality from GDP to research output for Canada.…”

Patentes y crecimiento económico, el caso de México durante el TLCAN

“…Al acrecentarse la competitividad y la productividad, el valor agregado en los sectores industriales también se expande, especialmente en aquellos intensivos en patentes (Hu y Png, 2013;Atun, Harvey y Wild, 2007;Thompson y Rushing, 1999). El progreso de la actividad empresarial se traduce en acumulación de capital y productividad, lo cual impacta positivamente la tasa de crecimiento económico (Park y Ginarte, 1997;Gould y Gruben,1996;Thompson y Rushing, 1996;Maradana, et al, 2017).…”

Innovation Capacity, Business Sophistication and Macroeconomic Stability: Empirical Evidence From Oecd Countries

“…Moreover, business sophistication, which would refer to the quality of business networks and the quality of businesses' operations and strategies, is one of the triggers that foster economic growth through improving efficiency, productivity, and profitability in the market (Dima, Begu, Vasilescu, & Maassen, 2018). Existing academic researchers in the literature have mainly focused on analysing firm or sector level data to discern an explanation for business innovation, research and development activities, along with the firm or sector level growth (Tsuji, Ueki, Shigeno, Idota, & Bunno, 2018). To the best of our knowledge, no academic attempt has been made to detect the two-way relationship of business sophistication, innovation, and macroeconomic stability of OECD countries while controlling financial development through the use of a single dataset.…”