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Can economic structural change and transition explain cross-country differences in innovative activity?


Wang, C and Lu, Y, Can economic structural change and transition explain cross-country differences in innovative activity?, Technological Forecasting and Social Change, 159 pp. 1-14. ISSN 0040-1625 (2020) [Refereed Article]

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Copyright 2020 Elsevier Inc.

DOI: doi:10.1016/j.techfore.2020.120194


Motivated by the combination of Schumpeter's view on innovation and the Kuznetsí retardation theory concerning structural change introduced by Quatraro (2009), this paper attempts to explain the impact of structural change on innovation. Using a global sample from 1970 to 2012 for a panel of 75 developed and developing countries with treatments for endogeneity by using physical instruments (2SLS) and the system GMM estimation technique, we find a positive significant effect of service sector share and a significant negative impact of the agriculture sector share on innovation. We also find these effects to differ in different economies characterized by income and structural transition phases. In particular, shifting away from the agriculture sector is found to be important for more advanced economies, while the industry sector is important for innovation among upper middle income economies. The low income economies generally benefit much less from their structural change efforts than lower middle, upper middle and high income economies do.

Item Details

Item Type:Refereed Article
Keywords:cross-country study, innovation structural changes, human capital, financial development
Research Division:Human Society
Research Group:Policy and administration
Research Field:Economic development policy
Objective Division:Economic Framework
Objective Group:Macroeconomics
Objective Field:Economic growth
UTAS Author:Lu, Y (Mr Yifan Lu)
ID Code:139923
Year Published:2020
Web of Science® Times Cited:3
Deposited By:TSBE
Deposited On:2020-07-16
Last Modified:2020-08-25

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