Feedback effects of economic growth on innovation: a country-level empirical study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Senthilkumar Thangavelu ◽  
Sangeetha Gunasekar ◽  
Amalendu Jyotishi
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Developed Countries ◽  
Feedback Effect ◽  
Negative Slope ◽  
Feedback Effects ◽  
Content Type ◽  
Innovation Activities ◽  
Global Innovation ◽  
Innovation Policies

Purpose The purpose of this paper is to understand the nature of the feedback effects of economic growth on innovation. The question is whether the economies with higher levels of endowments have a declining feedback effect of income on innovation and contribute to the development of effective innovation policies are raised. Design/methodology/approach This study hypothesizes that innovation input’s response to economic growth in terms of income is an inverted “U” shaped path, whereas the innovation output’s response to income is positive and asymptotic. This paper uses the global innovation index data of 154 countries over the period 2013–2017 on innovation and gross domestic product for the analysis using the fixed-effect regression models. Findings The results confirmed the inverted U shaped relationship in the line of Kuznets’s curve for innovation input and that of negative slope and asymptotic behaviour for innovation output. Research limitations/implications In this study, the analysis performed using the global innovation index 2013–2017 data. This study can be extended at each factor level to understand this phenomenon in depth with more data and to help in improving the innovation policies for the betterment of the economic growth. Practical implications This study suggests that developed countries need to guard against complacency in their innovation efforts because of the asymptotic nature exhibited through the effective development of innovation policies. The developing economies can look forward to establishing themselves in the domains of innovation input through imitation of technologies. Originality/value This paper extends the study of feedback effects of economic growth on innovation. This study brings out the nature of feedback effects of economic growth on input innovation and output innovation activities. The results show a declining feedback effect of income on innovation in economies with a higher level of endowments and highlight the inclusion of feedback effects of economic activities on the innovation while designing the innovation and economic policies of a country.

scholarly journals Adaptation of Globalization and Their Effect to the Tanzania Economic Growth

2018 ◽  
Vol 13 (8) ◽  
pp. 217
Author(s):  
Japhet Jacksoni Katanga ◽  
Seleman Pharles
Keyword(s):  
Economic Growth ◽  
Economic Development ◽  
International Cooperation ◽  
Developing Economies ◽  
Economic Inequality ◽  
Developed Countries ◽  
Advance Technology ◽  
African Countries ◽  
The Social

Globalization can be defined as the process based on international cooperation strategies, the aims of globalization is to expanded the operation of a certain business or service to become into a worldwide level, Globalization facilitate the modern advance technology which help community to undergo the social, political and economic development. Globalization economic has reinforced the margination for African developing economies and make to be dependent for the few primary commodities or service whereby the price and demand are extreme determine by externally. On this outcome it lead some of the African countries to be turn into poverty or economic inequality due let their own resources being determine by developed countries. On these paper you will get a chance to oversee the effect of adaption globalization to Tanzania economic growth.

scholarly journals Relative Earnings and Manpower Allocation in Developing Economies

1969 ◽  
Vol 9 (1) ◽  
pp. 14-34 ◽  
Author(s):  
Lloyd G. Reynolds
Keyword(s):  
Economic Growth ◽  
Subject Matter ◽  
Structural Changes ◽  
Developing Economies ◽  
Developed Countries ◽  
The Other ◽  
Labour Economics ◽  
Economic Behaviour ◽  
Agriculture Industry ◽  
Starting Point

The less developed countries (LDC) present two kinds of challenge to economists. First, they invite us to develop hypotheses about how economic growth begins and about structural changes during the early decades of growth. Second, they provide a fresh terrain on which specialists in particular subject-matter areas can test accepted notions about economic behaviour. For investigations in labour economics, the structure of earnings provides a convenient starting point. (It is best to say "earnings" rather than "wages" because most workers in the LDC's are self-emplqyed.) Analysis of earnings requires an examination of manpower supplies and requirements. This leads into the economics of agriculture, industry, government, and other labour demanding sectors on one side, and into a study of education and other skill-producing agencies, on the other. Thus by starting with the earnings structure, one is led rather directly into the heart of the economy.

Entrepreneurship and economic growth: does gender matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Sarah R. Crane
Keyword(s):  
Economic Growth ◽  
Developed Countries ◽  
Ordinary Least Squares ◽  
Cultural Barriers ◽  
Entrepreneurial Firms ◽  
Least Squares Regression ◽  
Content Type ◽  
World Survey ◽  
Country Analysis

PurposeEntrepreneurial firms contribute to economic growth, but the potential gendered nature of this contribution must be investigated as outcomes of male-owned and female-owned firms differ. The study investigates the female underperformance hypothesis in a cross-country analysis of Schumpeterian entrepreneurs. Next, it investigates if there is a gendered dimension of Schumpeterian firm contribution to economic growth.Design/methodology/approachThe study utilizes both nonparametric and parametric methodologies. Through nonparametric methods, the success of female-owned and male-owned firms is compared. Next, a parametric ordinary least squares regression model tests if there is a gendered nature of an entrepreneurial firm's economic contribution.FindingsIn nonparametric analyses, female-owned entrepreneurial firms in developed countries perform similarly to male-owned firms, while in developing countries male-owned firms significantly outperform female-owned firms. The author also finds strong evidence that the gender of the Schumpeterian entrepreneur does not matter in the contribution in economic growth.Research limitations/implicationsIn all countries, the number of female-owned entrepreneurial firms was significantly lower than that of male-owned firms. The findings point to consistent cultural barriers for women in innovation-related fields and persistent gendered norms in entrepreneurship. Thus, removal of cultural barriers and continued support for Schumpeterian entrepreneurship will benefit women and contribute to a country's economic growth.Originality/valueThe data for this study is a unique utilization of the Enterprise World Survey to identify Schumpeterian entrepreneurial firms. Additionally, the study challenges the female underperformance hypothesis and contributes to the literature on the role of entrepreneurship in economic growth.

Impact of general trust on bank risk-taking: the moderating effect of confidence in banks

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Heba Masoud ◽  
Mohamed Albaity
Keyword(s):  
Risk Taking ◽  
Developing Economies ◽  
Negative Relationship ◽  
Developed Countries ◽  
Moderating Effect ◽  
Bank Risk ◽  
World Value Survey ◽  
Mena Region ◽  
Content Type ◽  
General Trust

PurposeThis study examines the effect of general trust (GT) and confidence in banks (CIB) on bank risk-taking. Besides, it explores the moderating role of CIB on the relationship between GT and bank risk-taking.Design/methodology/approachSecondary data was obtained from the World Value Survey, World Bank and BankFocus from 2011 to 2018. Two-step system GMM estimator was used to examine the links between the GT and CIB with bank risk-taking in MENA region.FindingsResults indicated that both GT and CIB negatively influenced bank risk-taking. Moreover, CIB weakened the negative relationship between GT and bank risk-taking. However, the results were different for MENA region as compared to the full sample.Originality/valueThe studies on the link between trust and bank risk-taking are either carried out on an international sample or using a developed economies sample. However, the authors believe that developing economies might exhibit different relationships due to cultural and structural differences present in developed countries. Besides, the authors believe that testing the moderating effect of CIB could shed more light on the differences between developing and developed countries.

Innovation, institutions and economic growth in sub-Saharan Africa – an IV estimation of a panel threshold model

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Joseph Ato Forson ◽  
Rosemary Afrakomah Opoku ◽  
Michael Owusu Appiah ◽  
Evans Kyeremeh ◽  
Ibrahim Anyass Ahmed ◽  
...  
Keyword(s):  
Economic Growth ◽  
Developing Economies ◽  
Innovation Policy ◽  
Threshold Model ◽  
Sub Saharan Africa ◽  
Content Type ◽  
Panel Regressions ◽  
Sub Saharan ◽  
The Impact ◽  
The Relationship

PurposeThe significant impact of innovation in stimulating economic growth cannot be overemphasized, more importantly from policy perspective. For this reason, the relationship between innovation and economic growth in developing economies such as the ones in Africa has remained topical. Yet, innovation as a concept is multi-dimensional and cannot be measured by just one single variable. With hindsight of the traditional measures of innovation in literature, we augment it with the number of scientific journals published in the region to enrich this discourse.Design/methodology/approachWe focus on an approach that explores innovation policy qualitatively from various policy documents of selected countries in the region from three policy perspectives (i.e. institutional framework, financing and diffusion and interaction). We further investigate whether innovation as perceived differently is important for economic growth in 25 economies in sub-Saharan Africa over the period 1990–2016. Instrumental variable estimation of a threshold regression is used to capture the contributions of innovation as a multi-dimensional concept on economic growth, while dealing with endogeneity between the regressors and error term.FindingsThe results from both traditional panel regressions and IV panel threshold regressions show a positive relationship between innovation and economic growth, although the impact seems negligible. Institutional quality dampens innovation among low-regime economies, and the relation is persistent regardless of when the focus is on aggregate or decomposed institutional factors. The impact of innovation on economic growth in most regressions is robust to different dimensions of innovation. Yet, the coefficients of the innovation variables in the two regimes are quite dissimilar. While most countries in the region have offered financial support in the form of budgetary allocations to strengthen institutions, barriers to the design and implementation of innovation policies may be responsible for the sluggish contribution of innovation to the growth pattern of the region.Originality/valueSegregating economies of Africa into two distinct regimes based on a threshold of investment in education as a share of GDP in order to understand the relationship between innovation and economic growth is quite novel. This lends credence to the fact that innovation as a multifaceted concept does not take place by chance – it is carefully planned. We have enriched the discourse of innovation and thus helped in deepening understanding on this contentious subject.

E-Commerce Contribution to Economic Growth

2011 ◽  
pp. 140-154
Author(s):  
Ing-wei Huang ◽  
Songsak Vanichviroon
Keyword(s):  
Economic Growth ◽  
21St Century ◽  
Growth And Development ◽  
Developing Economies ◽  
Past Research ◽  
Developed Countries ◽  
Economic Growth And Development ◽  
Research Findings ◽  
Ict Development

As the trend of ICT development is gaining larger influence over countries’ development and growth, e-commerce plays an important role in enhancing the growth of several developed and developing economies over the 21st century. This paper aims to build the analytical base to support the importance of the development of e-commerce. This is by investigating the role and contribution of e-commerce to economic growth and development. The paper first investigates past contribution of e-commerce to economic growth in developed countries. Second, past research findings and framework are utilized to investigate the contribution of e-commerce towards economic growth focusing on the case of e-commerce in Thailand. The study found that e-commerce plays an important role in enhancing economic growth of Thailand. Two important findings had supported the growth of e-commerce. First is the increase in sales generated by the use of e-commerce. Second, e-commerce induces productivity development of firms through higher competition and innovation.

Innovation and institutions’ quality: a comparative study between countries

2020 ◽  
Vol 12 (2) ◽  
pp. 169-185
Author(s):  
Marcelo Koji Kawabata ◽  
Alceu Salles Camargo Junior
Keyword(s):  
Foreign Direct Investments ◽  
Content Type ◽  
Government Effectiveness ◽  
Business Environments ◽  
Innovation Activities ◽  
Regulatory Quality ◽  
The World Bank ◽  
Global Innovation ◽  
The Relationship

Purpose Innovation has been considered as an essential activity for companies to compete in modern and dynamic business environments. For the nations, innovation is considered a fundamental key activity for sustaining economic growth and competitive advantage over other countries. This paper aims to achieve a better understanding of the relationship between the quality of a country’s institutions and its levels of innovation activities and results. Design/methodology/approach Controlling for the effects of the efforts and investments in research and development (R&D) and the foreign direct investments (FDI), this work proceeds to regression analysis to obtain the association between the quality of countries’ institutions and their innovation activities. Data was obtained from the Global Innovation Index (GII) for innovation activities and the Worldwide Governance Index, of the World Bank, for the quality of institutions for 127 countries. Findings The results show that the effectiveness of public administration and the regulatory quality are the quality of institution variables associated with the innovation activities. Also, this paper obtained a clustering of countries with a rank regarding not only innovation activities but also the conditions of the institutions’ quality, based on government effectiveness, regulatory quality, R&D, FDI and GII. This new compounded classification divided the 127 countries into three clusters – mature innovators, fresh innovators and structuring for innovation. Originality/value New forms of innovations’ ranking viewing can help to understand the conditionings that enhance countries’ and institutions’ competitiveness.

An analysis of Japan’s connectivity to the global innovation system

2016 ◽  
Vol 24 (4) ◽  
pp. 399-423 ◽  
Author(s):  
Ahreum Lee ◽  
Ram Mudambi ◽  
Marcelo Cano-Kollmann
Keyword(s):  
Tacit Knowledge ◽  
Multinational Enterprises ◽  
Innovation System ◽  
Innovation Systems ◽  
Data Set ◽  
Content Type ◽  
Innovation Activities ◽  
Global Innovation ◽  
Knowledge Intensive ◽  
Short Product

Purpose In the modern knowledge-intensive economy, a nation’s competitiveness depends on the ability of its constituent firms to innovate. Extant research in national systems of innovation highlights institutions and public policies toward innovation as key determinants that affect firms’ innovation activities. This paper aims to widen the investigation by arguing that co-inventor connectivity allows firms to access the most tacit knowledge within global innovation systems. Therefore, it is one of the key factors that underpin a nation’s ability to develop and sustain its competitiveness. Design/methodology/approach Using a data set of 406,168 patents from US Patent and Trademark Office during the period of 1975-2004, this study analyzed the Japanese system of innovation through co-inventor networks. Findings Surprisingly, the authors found that compared to other advanced countries such as Germany and Denmark, the Japanese innovation system is quite closed. Originality/value The dimension of tacit knowledge is crucial in the current environment of rapid cycle time, short product lifespans and increasing emphasis on exploratory innovation. Hence the authors speculate that closedness to global innovation systems could be one of the reasons why many of Japan’s traditionally powerful multinational enterprises exhibit weak performance in recent years.

Sustainable frugality through EIA: role of socio‐ecological linkages in poverty alleviation

2007 ◽  
Vol 18 (5) ◽  
pp. 556-567 ◽  
Author(s):  
T. Rajaram ◽  
Ashutosh Das
Keyword(s):  
Economic Growth ◽  
Poverty Alleviation ◽  
Local Ecological Knowledge ◽  
Developed Countries ◽  
Ecological Knowledge ◽  
Content Type ◽  
Marginalized Communities ◽  
The Cost ◽  
Ecosystem Linkages

PurposeThe purpose of this paper is to bring out the shortcomings of the EIA model imported from developed countries when it is assessed for its focus on poverty alleviation in a developing nation (India) and to suggest improvements in the existing framework.Design/methodology/approachThe paper explores the current performance of EIA process in India, critically analyses the philosophy of continued sidelining of environmental protection in favour of unrestricted economic growth in the light of evidence regarding growing inequality.FindingsThe paper finds that for the proponent driven EIA model to contribute towards poverty alleviation, a new “socio‐ecological linkage document” is needed. This will bring out the fragile linkages that marginalized communities have with their local ecosystems and can be prepared with the help of local ecological knowledge. A framework to integrate the socio‐ecological linkage document into the EIA‐SEA‐SA domain is presented.Practical implicationsThe paper shows that the supportive framework of generating the “socio‐ecological linkage document” has the potential to enhance the EIA‐SEA‐SA process in terms of ensuring that plans, policies, programs and projects are sensitive to the need of ecosystem dependent poor.Originality/valueThe paper proposes a framework to support the alternative thinking that poverty alleviation can be enhanced through preservation of ecosystem linkages, in contrast to the modern paradigm of economic growth at the cost of ecosystem.

Financial development and economic growth in Tanzania: an ARDL and bound testing approach

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Saganga Mussa Kapaya
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Time Series Data ◽  
Developing Economies ◽  
Financial System ◽  
Principal Component ◽  
Series Data ◽  
Content Type ◽  
Testing Procedures ◽  
Positive Effects

Purpose The purpose of this study is to empirically weigh the evidence for financial depth, liquidity and efficiency role to economic growth, and test for the existence of cointegration between financial development variables and economic growth in Tanzania. Design/methodology/approach The study used the autoregressive distributed lag model with bound testing procedures. The sample covered yearly time-series data from 1980 to 2017, i.e. 38 years. Findings The results suggest that financial system depth is positively related to economic growth in the short run and that financial system liquidity and efficiency is strongly negatively associated with economic growth both in the short and long run. Further, it is found that financial development is cointegrated with economic growth. Thus, financial reforms and liberalisation have not fully brought the desired positive effects on economic growth yet. Originality/value The study uses principal component analysis to capture specific dimensions within the financial system as an intuitive way to aggregate financial development effects. Unlike studies that included several countries with heterogeneous characteristics, which are sometimes difficulty to homogenise, in recognition of countries’ unique experiences, this study uses data from Tanzania as a specific case. It documents pertinent pieces of evidence for a developing economy necessary for financial policy adjustments post the financial and economic liberalisation and reforms period. It nevertheless sheds light on financial policies for other comparable developing economies during and after both financial and economic liberalisation settings.

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