Research and development as a driver of innovation and economic growth; case of developing economies
Ayousha Fayyaz & Zoltán Bartha
What the paper says
Abstract The goal of this research is to uncover the channels through which research and development (R&D) impacts economic growth in developing countries. The study employed nine variables from three broader categories in the World Economic Forum database, each covering 32 countries from the lower-middle-income group for the year 2019. The theoretical framework is based on the R&D ecosystem, which includes components such as institutions, human capital, capital market, R&D, and innovation. Each of these components can contribute to the economic development of the country. Using structural equation modeling (SEM), we build a path diagram to visualize and confirm a potential relationship between the components. R&D features had a positive impact on innovation, as did capital market institutions, but neither had a significant impact on growth. According to the Schumpeterian institutional interpretation, R&D and innovation efforts may not lead to sustained growth in middle-income countries. We find no significant connection between innovation performance and economic growth. This suggests that while R&D and capital markets may contribute to innovation through entrepreneurship, this contribution is not impactful enough to drive economic growth in developing countries. Our findings provide further evidence of the middle-income trap.
5 citations
Evidence weight
Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40
| F · citation impact | 0.41 × 0.4 = 0.16 |
| M · momentum | 0.63 × 0.15 = 0.09 |
| V · venue signal | 0.50 × 0.05 = 0.03 |
| R · text relevance † | 0.50 × 0.4 = 0.20 |
† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.