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Endogenous Technological Change
... The use of panel data estimates has been a methodological approach characteristic of the literature on economic growth, which aims to find long-term relationships between variables Theoretical framework Theories of growth are classified as growth by factor accumulation, innovations, and institutional assumptions. Within the first group are Solow's (1956) exogenous growth model, Romer's (1990) endogenous technological change model, and Ramsey-Cass-Koopmans model. In the second group are the works of Schumpeter (1911), Young (1928), and Lorente (2018). ...
... The materialization of the investment is the capital stock at a given moment and its growth is known as capital accumulation. This process is expressed in equation (4), which is central to the explanation about the accumulation of factors that make the growth models of Solow (1956) and Romer (1990). In this way, the capital stock in period t can be understood as: ...
... The works of Solow (1956), Romer (1990) and Lorente (2018) guided the theoretical explanations of the document. While the methodology was based on the works of Alesina et al. (1996) and Barro (2000) with the use of large data panels. ...
The objective of the paper is to identify the determinants of economic growth in Latin America for the period 1951-2000. For this, three fixed effects models with panel data are estimated, capable of controlling unobservable heterogeneity within the sample. The results show that the growth of the Latin American income level has a positive and significant relationship with the capital stock, population growth, final household consumption, gross capital formation and the volume of exports. While the number of inhabitants at any given time, the final consumption of the general government and the level of inflation have a negative relationship. The number of Latin American inhabitants grew, they had more wealth and income at the end of the XX century, their education levels increased and in general: their quality of life improved.
... As mentioned previously, the availability of a skilled labor force is an important parameter for new businesses and industries searching for sites in communities and regions. Romer (1990) introduced a seminal idea that technological change innovated by people can induce economic growth or the "stock of human capital determines the rate of growth." Innovation in industrial products and processes do not happen because of exogenous factors, but people taking intentional actions for technological advancements to benefit from market incentives (Romer, 1990). ...
... Romer (1990) introduced a seminal idea that technological change innovated by people can induce economic growth or the "stock of human capital determines the rate of growth." Innovation in industrial products and processes do not happen because of exogenous factors, but people taking intentional actions for technological advancements to benefit from market incentives (Romer, 1990). The endogenous growth theory implies that economic growth could result from innovations in technology, products, and processes within the regional or national economy. ...
... The endogenous growth theory implies that economic growth could result from innovations in technology, products, and processes within the regional or national economy. 10 Note that the model for economic output postulated by Romer (1990) included four inputs which were capital, labor, human capital, and the level of technology. The occupations and their characteristics especially education, knowledge and skills represent the human capital aspects or the quality of the labor force. ...
Occupations and skills analysis have become as important as the analysis of industries for economic and workforce development in the U.S. This research and policy insight article explores analytical methods to develop occupations by skills clusters for the U.S. by using public sources of data. The article presents different methods and results, and ways to identify an optimal number of occupations by skills clusters. It concludes by presenting policy implications and practical applications for such databases including future directions for the research.
... The goal of this research is to methodically analyse and comprehend the influence of AI on labour market dynamics using recognized economic theories. This research intends to provide a complete perspective on how AI is transforming the global labour market by including ideas from Romer (Romer, 1990), Schumpeter (Schumpeter, 2013), Solow (Solow, 1957), and Becker (Becker, 2009). ...
... The paper explores economic theory to provide a detailed analysis of how artificial intelligence (AI) affects labour market dynamics. Romer's Endogenous growth theory (Romer, 1990) suggests that internal causes like technical advancements and human knowledge mostly propel economic progress. This research questions emphasise the importance of AI in boosting productivity and promoting economic growth. ...
... Endogenous growth theory (Romer, 1990) emphasizes the capacity of AI to greatly enhance productivity and economic growth via fostering creativity. Creative destruction advances the concept where AI displaces jobs in some industries while creating new ones in others, highlighting the dynamic nature of technological progress (Schumpeter, 2013). ...
This study examines the relationship between labour market changes and artificial intelligence, utilising Romer’s Endogenous growth theory, Schumpeter’s Creative destruction, Solow’s Growth model and Becker’s Human capital theory as theoretical frameworks. The purpose of this research is to clarify the multifaceted impacts of artificial intelligence on economic growth, workforce adjustment and the emergence of novel employment trends, focusing specifically on job losses and gains, wage inequalities, and changing skill requirements. Using a structured literature review methodology, the economic implications of artificial intelligence in the labour market were systematically analysed and synthesised. The results suggest that although artificial intelligence significantly enhances productivity and innovation, it has a complex effect on the labour market, causing employment gains in technologically sophisticated industries and losses in sectors prone to automation. The study emphasises strategic policy interventions and pedagogical reforms that maximise the economic benefits of AI while minimising its disruptive effects on employment. Proponents of such policies argue that by cultivating a workforce that is resilient and capable of adjusting to changes driven by artificial intelligence, they can effectively mitigate inequality and safeguard economic stability.
... Lucas (1988) viewed human capital as the primary variable driving growth, highlighting the positive effects of human capital on the productivity of other individuals within the surrounding environment. Romer's (1990) endogenous growth theory also emphasized the role of knowledge as a key factor in growth. As a result, human capital emerged as a fundamental variable incorporated into growth models. ...
... The research implemented the endogenous growth framework pioneered by Romer (1990) and Lucas (1988), building upon the neoclassical growth theory advanced by Ramsey (1928). Solow (1956) is credited with popularizing the neoclassical model, which posits technological change as exogenous and maintains constant returns to scale. ...
Entrepreneurship is an essential and inexhaustible resource that significantly contributes to the development of countries. It embodies a valuable and cost-effective asset rooted in human creativity and innovation. Societies that prioritize human capital and intellectual capacity over reliance on natural resources tend to achieve greater long-term success. This study investigates the impact of entrepreneurship on economic growth in Iran through the lens of a growth model. Utilizing the Autoregressive Distributed Lags (ARDL) method, the analysis encompasses data from 1980 to 2022. The results indicate that various indices of entrepreneurship exert a positive and significant influence on Iran's economic growth during the specified period. The findings underscore the need for implementing advanced strategies to accelerate growth and align more closely with the Schumpeterian framework. Policymakers are encouraged to emphasize the promotion of innovative entrepreneurial activities to enhance economic growth and development.
... The Solow model meticulously outlined the dynamics of capital, labor, and technology, providing profound insights into economic development (Solow 1956). The intellectual journey continued with Paul Romer's endogenous growth theory, introducing the transformative role of innovation in shaping our economic trajectory (Romer 1990). This ongoing exploration, marked by meticulous investigation and collaborative endeavors, has been fundamental to our progress. ...
... From a technical perspective, our digitalization, likened to a surgical procedure, is grounded in the well-established theory of endogenous growth proposed by Paul Romer. We developed digital applications for the popular AK model (Romer 1990). Romer's work substantiates that leveraging innovation is the key to economic growth. ...
Over 15 years, the Human Information Technology Laboratory in Finland has undertaken an exploration of sustainable growth at the nexus of technology, economics, and society. Diverging from traditional academic approaches, this study is dedicated to offering pragmatic solutions.
Set against the backdrop of technological convergence, this enduring innovation project grapples with the intricacies of economic, societal, and individual challenges. The overarching aim is to transcend theoretical constructs and foster sustainable technological growth, guided by insights from human biology and surgical methodologies.
Unfolding across three distinct phases from 2008 to 2023, the study encompasses transformative projects such as Dream City, Geniementor, Genieteams, Big Data Social Matching, The Navigator, Maestro, and BankRabbna. These initiatives explore different realms like data monetization, personalized education, collective innovation, and the digitalization of national and international labor markets.
At the heart of the study is the introduction of the Digital Sustainable Growth Model (DSGM), heralding an innovative governance approach. The DSGM aspires to cultivate adaptable and intelligent technology to propel socio-economic development in the digital era, drawing parallels with the flexibility and intelligence inherent in the human body.
Through adeptly addressing various barriers, the study identified a feasible technological solution exemplified by the development of the Growth Model showcased in technologies like Maestro, Fourqan, and BankRabbna. The recommendations underscore the critical importance of fostering international cooperation as an integral aspect of navigating the challenges associated with sustainable growth.
... The second form of studies which of course is the focus of many recent growth literature has sought to investigate the variables underlying economic growth. These studies have identified varied factors that explain the observed differences in economic growth across countries and regions over time using diverse methodologies (For example, Lucas, 1988;Romer, 1990;Barro, 1991;Summers and Heston, 1991;Mankiw, Romer and Weil, 1992;Sachs and Warner, 1997;Barro and Sala-i-Martin, 2004;Lensink and Morrissey, 2006). ...
... We therefore follow theory and earlier researchers and specify a growth model based on aggregate production function. In this specification, we see economic growth as dependent on human capital (Sala-i-Martin, 2004;Mankiw et al, 1994;Barro, 1991;Romer, 1990), investment in physical capital (Artelaris et al., 2007;Barro and Sala-i-Martin, 2004;Levine and Renelt, 1992), foreign aid (Gyimah-Brempong et al, 2007;Morrissey et al, 2005;Hansen and Tarp, 20000). Several other studies also stress the significance of trade openness in economic performance (Yanikkaya, 2003;Sachs and Warner, 1997;Wacziarg, 2001). ...
This paper provides a contribution to the growth empirics in sub-Saharan Africa with a focus on identifying the major determinants of long run economic growth among SSA countries. Being aware of the overwhelming dominance of parametric regression methodology in the extant literature and its associated numerous setbacks, we specifically employ the local linear kernel estimator which does not assume any functional form for the underlying growth model. At the end of the study, the findings suggest that there is a positive and nonlinear relationship between economic growth on one hand as well as investment in physical capital, population and democracy on the other hand. Again, while we find that human capital and inflation have no significant effect on economic growth over the study period, foreign aid was found to have negative effect on economic growth in SSA. The findings obtained in the paper have important implications for growth policy in SSA. Growth policies should thus consider population control, expanding and improving the quality of education and enrolment especially at the higher levels and strengthen democratic institutions. For research, the findings imply that researchers should be cautious in specifying the functional form of growth models when investigating the determinants of economic growth.
... From the growth macroeconomics perspective, GPT-driven growth theory builds on the endogenous growth models with expanding product variety (Romer 1990;Grossman and Helpman 1991) and the Schumpeterian growth model of Howitt (1992, 2009). ...
... GPT models also extend the models of Lucas (1988) and Romer (1986Romer ( , 1990) by explicitly considering the interaction between technology breakthroughs and complementary technologies (Faccarello and Kurz 2016). 27 Helpman (2004) suggests a significant difference between GPTs, and endogenous growth models is that radical innovation drives the former, while incremental innovation drives the latter. ...
This chapter is about radical innovation and disruptive technological change. Discovering the nature and mechanisms of disruptive technological change can help to understand the long-run dynamics of innovation and map profound transformation in socioeconomic systems. The chapter considers four concepts essential for the understanding radical and disruptive technological change: long waves, techno-economic paradigms, general purpose technologies (GPTs), and disruptive technologies. We conclude with some insights on the emerging technologies in the latest techno-economic paradigm. The tools and concepts given here remain the cornerstone of a useful theory of innovation and change even in our current complex socio-technical landscape.
... For a firm to innovate, it has to meet certain necessary conditions. These include infrastructure, access to the rule of law, availability of skilled labour, affordability of technology, the scope for learning, opportunities to collaborate university or training system, the state and the industry (Arrow, 1971;Coase, 1937;Cooke, 2001;Lall, 2000;Marshall, 1920;Nelson & Winter, 1982;Penrose, 1952;Penrose & Penrose, 2009;Romer, 1990;Williamson, 2002). These boundary conditions do not just capture physical or legal dimensions but also cover factors like a collaboration with the providers of learning, technology, business and rights. ...
... These firms struggle to satisfy boundary conditions. However, they have many affordable options to create a capable workforce through ways such as updated learning processes (Coase, 1937;Romer, 1990). If the culture of learning, either through formal or informal channels, persists, the cumulative experience from it will lead to outcomes like innovation (Smith, 2017). ...
Small firms choose to innovate even in a challenging environment. Unlike stylised facts, innovation by small and medium firms in South Asia is not just technology-based but is rather human resource oriented. Using microdata from the World Bank Enterprise Surveys, we find that learning, research and development, and formal training impact innovation the most. We use a mix of frequentist statistics and machine learning algorithms. Learning is the core factor valid for all streams of innovation. Combining the learning with the other two causes a discernible increase in the chance to innovate. Any improvement in learning in the firm will make strides in innovation. However, to sustain this, there is a need for policies that combine innovation with research and development and with training. An innovation ecosystem that fosters these combinations through collaborations will be impactful. Learning is the tipping point of innovation to have new products and processes, an adaptive organisation and a new marketing strategy.
... Furthermore, GDP growth shows a significant positive impact on ROA, indicating that economic growth supports better financial performance for firms. This aligns with endogenous growth theory Romer, (1990), which posits that economic growth can enhance firm productivity and profitability through increased demand and investment opportunities. This finding is supported by studies such as Demirgüç-Kunt et al. (2020) and Aniemeke, (2024), which highlight the importance of macroeconomic stability and growth as crucial determinants of bank profitability. ...
... This supports the Trade-Off Theory of Capital Structure, which posits that firms balance the tax advantages of debt against the potential costs of financial distress (Fama & French, 2002;Vo et al., 2022). Moreover, GDP growth shows a significant positive impact on ROA, indicating that economic growth supports better financial performance for firms, consistent with the Endogenous Growth Theory Romer, (1990). This finding is also supported by studies such as (Demirgüç-Kunt et al., 2020). ...
This study investigates the effects of COVID-19 on the financial performance of listed firms in the financial and consumer goods industries in Tanzania and Kenya. The choice of Tanzania and Kenya as focal points is motivated by their contrasting responses to the pandemic and their roles as economic powerhouses in the region. Using data from the Dar es Salaam Stock Exchange and Nairobi Stock Exchange spanning the period from 2015 to 2022, the study employs the Dynamic panel-data model, the two-step system GMM, to quantify the impact of the pandemic. The research has two specific objectives: to analyze the effect of COVID-19 on the financial performance of listed firms in the financial industry and to assess its impact on the consumer goods industry in both countries. Key findings reveal that in the financial sector, firms showed resilience with a positive impact on profitability during the pandemic, driven by the adoption of digital financial services and effective risk management. In contrast, the consumer goods sector experienced a significant negative impact, highlighting severe disruptions in supply chains and consumer demand. Notably, firms in Tanzania outperformed those in Kenya, due to less restrictive COVID-19 measures. These findings suggest policymakers should support digital innovations, prudent leveraging, and economic growth to sustain and improve firm profitability during future disruptions.
... These incremental improvements enhance the ability of a firm to produce more output with the given quantity of inputs or use fewer inputs to produce a given quantity of output -a concept famously recognized by Fare et al. (1994) as technical efficiency change. Further, technological improvements shift the benchmark production frontier outwards over time (Romer, 1990). These shifts are characterized by technical progress. ...
... Hence, in a neoclassical growth model, a firm is not in a position to pay (and recoup) any costs relating to innovation. Subsequently, Romer (1990) attempts to relax the strict assumptions of the neoclassical model by allowing firms to earn supernormal profits from patented innovations. Aghion and Howitt (1992) extend this argument by stating that innovations in IT and R&D grant monopolistic rights to the innovating firm, allowing it to charge a higher marginal revenue relative to marginal costs. ...
Information technology is a critical driver of productivity growth in modern economies. However, there has been no convincing explanation for the observed discrepancy in the literature, increasing suspicion on whether IT can improve institutional performance in contemporary banking markets. The fallacy of productivity adds credence to Robert Solow’s dictum, “You can see the computer age everywhere except in productivity statistics”. We employ two extensive bank-level datasets of 5,794 institutions across 37 nations to estimate the total factor productivity (TFP) payoffs from IT in BRICS and European markets. A DEA-based, Malmquist productivity index quantifies TFP change and its respective components. Findings provide evidence against the paradox as both regions experience IT-fueled productivity growth. Nevertheless, such associations vary across banking sector development, rationalizing how IT spending can explain productivity differences across nations. For BRICS banks, a significant proportion of TFP growth originates from frontier expansion instead of frontier progression, signaling a widening of technology gap. Contrastingly, IT has diminished the technology gap between European banks. Intra-country comparisons suggest that if IT-driven productivity growth is regarded as a nation’s long-term goal, industry characteristics should govern the distribution of knowledge capital.
... First, education can increase the human capital inherent in the labor force, which increases labor productivity and thus transitional growth toward a higher equilibrium level of output (as in augmented neoclassical growth theories, (Mankiw, Romer and Weil, 1992)). Second, education can increase the innovative capacity of the economy, and the new knowledge on new technologies, products, and processes promotes growth (as in theories of endogenous growth, Lucas (1988), Romer (1990), Aghion and Howitt (1998)). Third, education can facilitate the diffusion and transmission of knowledge needed to understand and process new information and to successfully implement new technologies devised by others, which again promotes economic growth (Nelson and Phelps, 1966;Benhabib and Spiegel, 1994). ...
This paper investigates the relationship between foreign direct investment (FDI) and education output in Nigeria between 1970-2014 using the tools of time series econometrics to explore the possibility of long-run and short-run relationships among the relevant macroeconomic variables. Specifically, the Engle-Granger (1987) two step modeling (EGM) procedure involving: cointegration analysis and error correction of parameter estimates were used. Education contribution to the Gross domestic product is taken as dependent variable while foreign direct investment inflow into the country and inflation rate as independent variables. All the variables used are integrated of order one. The results suggest that there is a positive but not statistical relation between the growth of the education sector and foreign direct investment in the country in the short and long-run period. The paper concludes that FDI inflow into the country does not affect the education sector positively and recommends that government should create the necessary environment that will regulate inflation rate which is highly essential for the growth of the education sector and also the attraction of FDI inflows into the economy.
... Complementariamente está el planteamiento de Romer (1990) y Barro (1991) quienes demostraron la necesidad de elevar el nivel del capital humano de una población para mejorar su bienestar. Así las cosas, a medida que se eleva el capital humano o nivel educativo de las personas se generaría una espiral de crecimiento económico de largo plazo, esencialmente por la generación de desarrollo tecnológico. ...
El propósito principal de esta investigación fue el de analizar la relación entre la Inversión Extranjera Directa (IED) total y el sector minero energético en el desarrollo humano en Colombia de 1990 al 2021, por medio de la estimación de dos Vectores Autorregresivos -VAR- que dieron cuenta de la relación de causalidad de las variables. El primer vector tuvo en cuenta la IED total, mientras que el segundo se ocupó de la IED del sector minero energético que para del 2003 al 2010 representó, en promedio, un 55% de la IED total, siendo el año cumbre el 2010, cuando alcanzó el 76% de la misma. Además, se estimaron dos Vectores de Corrección de Error -VEC- como prueba de robustez que confirmaron los resultados obtenidos. En las dos estimaciones se tuvieron en cuenta como variables endógenas el Índice de Desarrollo Humano (IDH), la Inversión Extranjera Directa (IED) y el Índice de Tasa de Cambio Real (ITCR), mientras que los precios del petróleo referencia WTI a precios 2015 se consideraron exógenos. Como resultado se encontró que fue el IDH el que causó a la IED total, en el sentido de Granger, mientras que para la IED minero energética no se encontró significancia. De esta manera, un aumento en un 1% del IDH generó un incremento del 10,15% en la entrada de IED total.
... Con todos los aportes anteriores, el desarrollo humano fue tomado por el PNUD (1990) y ul Haq (1991) en tres componentes primordiales: la esperanza de vida, el nivel educativo y el ingreso per cápita, presentado en un indicador compuesto que se denominó Índice de Desarrollo Humano (IDH). Posteriormente, el marco de los estudios económicos se enfoca en mejorar las condiciones iniciales para que los individuos puedan disfrutar de libertades instrumentales (que son de tipo políticas, económicas, sociales, de seguridad, etc.) que le posibiliten alcanzar mayores niveles de desarrollo en conjunto a la sociedad y los territorios (Sen, 1998;Castillo et al., 2020), tales libertades son las que dan como factible la obtención del capital humano que procede a la generación de avances tecnológicos que tanto impactan positivamente el crecimiento económico de las naciones (Romer, 1990;Barro, 1991). ...
El objetivo de este artículo es pronosticar el comportamiento del desarrollo humano en el departamento del Meta para los años 2020 a 2030, a través de un modelo Autorregresivo Integrado de Medias Móviles (ARIMA). Como variable proxy se tomó el Índice de Desarrollo Humano (IDH) del Meta de 1990 a 2019. El resultado más relevante es que el desarrollo humano continuará teniendo una tendencia positiva basada en el comportamiento histórico de los sectores económicos, como el petrolero y el agropecuario. Sin embargo, aún persisten las dudas sobre cuál de los sectores económicos es el que está determinando el pronóstico.
... In contrast to the above view is the endogenous growth model studied by Nelson and Phelps (1991); Aghion and Howitt (1998), they view human capital as a catalyst that promotes technological progress, it is a condition for technological change, there exists a close cause-and-effect relationship between human capital, technology and economic growth. Human capital can promote the technological activities of enterprises through innovation, imitation or application of new technologies (Romer, 1990;Teixeira & Fortuna, 2004), thereby creating motivation for growth of businesses and the economy. Besides, the diffusion of ICT has greatly improved the efficiency of resource allocation, significantly reduced production costs and promoted much greater demand and investment in all economic sectors (Arthur Grimes, Cleo Ren, Philip Stevens, 2012). ...
This study aims to examine the factors of human capital and technology (ICT) that impact the economic growth of localities in Vietnam in the period 2016-2021. The study also evaluates the interactive impact between information technology factors and human capital factors on economic growth. The data used is based on secondary data of 63 Vietnamese provinces and cities in the period 2016-2021, extracted directly from the General Statistics Office and Vietnamese business white papers. Data on indicators representing ICT are collected through the Vietnam ICT Readiness Index for Development and Application Report released by the Ministry of Information and Communication. Using SGMM will allow to overcome model defects such as multicollinearity, autocorrelation, heteroscedasticity and endogenous variables. The results show that the variables of the rate of labor over 15 years old, or the rate of workers with vocational training, have a positive impact on economic growth, while the factors of the number of people attending secondary school or spending on Education has a negative impact on local economic growth. The technology index (ICT) has a positive impact while the information technology human resource index has a negative impact on growth. Under the interactive impact of ICT, it can increase growth but can also reduce economic growth at a higher level. These results help provide some policy implications to help improve economic growth for localities in the next period by increasing the use of technology and continuously improving the quality of human capital.
... Skills development of the human capital has an important bearing on the economic productivity and growth of a country (Kemal, 2005). The Endogenous Theory of economic growth places human capital at the core of the economic growth process (Romer, 1990). While Pakistan currently ranks 161 st among 189 countries on the United Nation's Human Development Index (HDI) (UNDP, 2022), skills development remains one of the most neglected sectors as Pakistan has not been able to improve the vocational/jobrelated skills, which has resulted in the widening of skills-gap, limited availability of skilled workforce, and consequent loss of productivity and burgeoning unemployment rate, inter alia (Atta-ur-Rahman et al., 2005). ...
This study investigates the effectiveness of skills development programs in Pakistan, particularly focusing on the Punjab Skills Development Fund (PSDF). It assessed programs' impact on employability and identified gaps in the current skills development framework. The present quantitative research found that PSDF's programs have successfully enhanced the employability of trainees. Most trainees reported positive outcomes, including securing employment and achieving personal and professional growth. The study identified several critical gaps, including the need for standardized curricula, improved training infrastructure, stronger industry linkages, and a more effective coordination mechanism between federal and provincial governments. Additionally, need to address the issue of access and equity, particularly for women and marginalized groups. To fully harness the potential of skills development, it is crucial to address these gaps and implement evidence-based policy reforms. By investing in quality training, strengthening industry partnerships, and promoting innovative approaches, Pakistan can build a skilled workforce that drives economic growth and social development.
... Solow (1956) developed a growth model that highlights the importance of technological progress in increasing output and efficiency over time, forming the basis for understanding economic growth in a dynamic context. Building on Solow's model, Romer (1990) proposed an endogenous growth theory that places technological innovation and human capital at the center of long-term economic growth. These models underscore the role of efficiency in achieving sustained economic progress and have influenced both economic theory and policymaking. ...
This article provides a detailed discussion of efficiency, national economic efficiency, growth in production efficiency, and the main indicators of production efficiency. It highlights how the state or other economic centers aim to increase the efficiency of the national economy through monetary, financial-credit, and tax management relations.
... Conversely, physical capital, labor, human capital, and technology are strongly and positively associated with economic growth in ASEAN countries. Physical capital, labor, human capital, and technology are recognized as fundamental factors of economic growth by growth theories, from neoclassical exogenous models (Solow, 1956;Swan, 1956) to endogenous frameworks (Arrow, 1962;Uzawa, 1965;Lucas, 1988;Romer, 1986Romer, , 1990Grossman & Helpman, 1991;Aghion & Howitt, 1992;Farmer & Schelnast, 2021). Later, modern institutionalism considers these determinants as proximate factors, emphasizing institutions as the ultimate source of economic growth (North, 1990;Acemoglu et al., 2012). ...
... The endogenous growth models famously promoted by Aghion et al. (1998) and Romer (1989) postulate that it is export that leads to innovation. ...
... and fundamentally reshaped the understanding of how economies grow. Pioneered by economists like Paul Romer (1990) The theory suggests that growth driven by these internal factors can lead to more equitable development. However, it also highlights the need for policies ensuring that the benefits of growth, particularly technological advancements, are broadly shared. ...
Trade Openness and Income Inequality in African Least developed countries. focusing on the impacts of Trade Openness On Income inequality among African LDCs
... Investments in education, training, and skill development contribute to increased productivity and innovation. Romer (1990) asserted that technological progress and innovation enables growth through investments in research and development (R&D) and the accumulation of knowledge lead to technological progress, fostering productivity gains and sustained growth. Another crucial tenet in endogenous theory is the incorporating of the idea on positive externalities and knowledge spillovers that enable firms enjoy competitiveness because of their linkages with multinational corporations (MNC) (Grossman & Helpman, 1991). ...
The aim of this study is to investigate the impact of non-renewable energy (NRE) on economic growth in selected Organization of Petroleum Exporting Countries (OPEC). Secondary data sourced obtained from IEA, WDI, and OPEC database for data between 2014 and 2022 were utilized in this study. The variables employed in this study are RGDP (proxy for economic growth), Non-renewable energy (NRE) and Global competitiveness indicator (GCI). In order to address issues of endogeneity across the OPEC this paper utilized a difference generalized method of moment (GMM) (N>T) and established that NRE is a positive and significant enabler of economic growth in OPEC. On the other hand, the result showed that the global competitiveness Index has a negative impact on economic growth in OPEC. The paper therefore concluded that NRE although a contributor to greenhouse gas (GHG) provides revenue for fiscal operations and is a supplier of cost-effective energy for industry that in turn stimulates economic growth in OPEC. In conclusion, this paper submitted that NRE is a significant enabler of economic growth in OPEC. This study therefore recommended that OPEC should utilize gradual approach in achieving its energy diversification and transition policy since NRE has a robust role in enabling growth in the region.
... Examining the possibility of endogenous growth by including initial economic prosperity is routinely considered by many growth studies (Baten & van Zanten, 2008;Romer, 1990). Accordingly, we include GDP in 2015 in some of the models (GDP2015). ...
This paper uses recent global data on book production to study their impacts on economic growth. Books are key inputs in human capital formation and knowledge flows/continuity, which impact economic growth. Our results, using data from nearly 100 nations over 2018–2021, show that books positively contribute to economic growth. This is true whether total books deposited in recognized repositories are used or when they are normalized by population. E-books are also shown to complement the effects of conventional books. The positive growth dividends over a period that encompasses the recent pandemic are insightful. In other results, internet access (and the degree of globalization) has complementary growth effects. Finally, the effects of some of the growth influences are shown to vary across the least- and most-growing nations.
... The present study constructs a theoretical model where the economy is divided into three final goods sectors-agriculture, industry and services. It has incorporated the effects of endogenous technological progress and human capital formation into the model along the lines of Lucas (1988) and Romer (1990). The productivity differences in different sectors caused by endogenous technological innovations and human capital formation have been used to explain the transfer of labour and capital from one sector to another leading to structural change. ...
This paper explains the increasing service export in low and middle-income countries of the world and tries to relate it with structural change and pattern of growth. The authors have constructed a theoretical model to derive hypotheses and estimated empirical results from panel regressions based on data from 34 low and middle-income countries. The theoretical results show that productivity differences caused by endogenous technological innovations and human capital formation lead to a reallocation of resources and structural change. As a result, the relative prices of the goods change. This paper shows that the growing service export is the reflection of industrial backwardness due to lack of capital, technological innovation and infrastructure. The results of panel regression also reveal that service sector-led growth and investment in human capital formation have a significant effect on service export while expenditure on R & D is so low in such countries that it has no effect on per capita income, industrial growth and service export. As investment in human capital formation is high and R&D expenditure is low, the developing countries experience unbalanced growth with an increasing share of services in GDP and export.
... Knowledge is an important driver of innovation and economic growth (see, e.g. Keller, 2021;Saito & Gopinath, 2011;Romer, 1990). However, the most useful forms of knowledge for firms are by nature tacit and they cannot be easily acquired (Polanyi, 1958). ...
Do workers hired from superstar tech firms contribute to better firm performance? To address this question, we analyse the effects of spillovers from Nokia in the context of a quasi-natural experiment: the closure of Nokia’s mobile device division and the massive labor movement it implied. We apply a two-stage difference-in-differences approach with heterogeneous treatment to estimate the causal effects of hiring former Nokia employees. We do not find strong evidence of a positive causal role of former Nokia workers on firm performance in terms of employment, value added, and net sales, and even less so on labor productivity.
... Sin embargo, si se diferencia entre el conocimiento (o capital humano) unido al factor trabajo, es decir a la persona, y el conocimiento no directamente unido a ella, en el segundo caso claramente no existe rivalidad en el uso (Romer, 1990). El conocimiento puede ser utilizado por otras personas sin que esto perjudique al dueño. ...
Describe el desarrollo y analiza la situación del sector de educación técnica en Bolivia en relación con el desarrollo.
... According to these theories, increased openness to trade allows nations to specialize in the production of goods and services in which they have a comparative advantage, leading to greater efficiency and higher overall output. This can result in enhanced productivity, technological advancement, and ultimately, economic growth (Balassa, 1965: Romer, 1990 (Lucas, 1988: Solow, 1956 ...
The study objects to investigate trade openness, foreign direct investment (FDI) and their impact on economic growth of Myanmar for the periods between 1990 and 2022. Authors employ Ordinary Least Squares (OLS) multiple linear regression model and Exponential Smooth Threshold Regression (ESTR) Model. Before model estimation, we first performed a Unit Root Testing with Phillips-Perron (1988) to check the stationarity issues. We second performed Pearson correlation test to check if the correlation exists between dependent and independent variables before model estimation. The findings of the results reveal that trade openness has positive influence on economic growth of Myanmar. The results also show that foreign direct investment does not have positive effect on economic growth of Myanmar. Future study is encouraged to adopt models that can capture short-/long-run relationships between dependent and independent variables.
... However, the modern growth theory offers the theoretical basis for understanding the favourable link between trade openness and economic growth. Endogenous growth theory posits that trade openness facilitates technology spillovers, which leads to enhanced international competitiveness, increased productivity, and increased export revenues (Romer 1990). Lucas (1988) emphasized the importance of trade openness to enhance human capital by exposing workers and firms to new ideas and technology and thus to promote economic growth. ...
The relationship between trade openness and economic growth is complex. We employ a structural vector auto-regression (SVAR) model using quarterly data for the period from 2005 to 2022 to estimate the impact of trade openness on the economic growth in North Macedonia. The study's
findings indicate a negative and significant relationship between trade openness and economic
development in the short and long run. The complexity of this relationship highlights an adverse
impact on countries specialising in low-quality production or those with low levels of human capital
accumulation, such as North Macedonia. The dynamic effects of shocks to trade openness on
interest rates, consumer price index, interest rates, labour force, and exchange rate are investigated
using impulse response functions. The paper suggests that North Macedonia's trade strategy requires
reorientation towards trade diversification, attracting export-oriented FDIs, and fostering regional trade integration to achieve sustainable economic growth and development.
... Pour les objectifs de développement durable, les congés fiscaux contribuent à la diversification économique et à la résilience face aux chocs externes. En se basant sur la théorie de la "croissance endogène" (Romer, 1990) ...
Les congés fiscaux sont largement utilisés par les pays en développement, notamment en Afrique, pour attirer les investissements directs étrangers (IDE). Toutefois, leur efficacité à long terme demeure débattue. Cet article propose une analyse critique du rôle des congés fiscaux dans le cadre de la concurrence fiscale, en explorant leurs avantages et leurs limites. À travers une revue de la littérature théorique et empirique, ainsi que l’étude des modèles de négociation et de signalisation, nous démontrons que si ces dispositifs peuvent encourager les firmes à s’installer temporairement, ils risquent de fragiliser la capacité budgétaire des pays hôtes. Les résultats mettent en avant l'importance de réformes structurelles parallèles, comme l’amélioration des infrastructures et de la gouvernance, afin de garantir une attractivité durable et éviter une « course vers le bas » fiscale. Cet article appelle également à une coopération régionale pour limiter la surenchère fiscale et maximiser l’impact des IDE sur le développement économique.
... This study's brief theoretical exposition is grounded in the endogenous growth theory, which infers that human capital, innovations, and knowledge are the fundamental propellers of economic growth as against physical investments [28,29]. The endogenous growth premise encourages the convergence of economies through the spread of technology [30,31]. ...
This study determined the impacts of non-renewable and renewable energy consumption on natural resource productivity alongside human capital and technology transfer roles for 40 selected developing economies. The study relied on a dataset sourced between 1991 and 2021. The study applied the method of moments quantile regression (MMQREG) procedure for the analyses while ensuring inferential robustness through the fully modified ordinary least squares (FMOLS), dynamic OLS (DOLS), and Driscoll-Kraay (D-K) methods. Empirically, the study revealed that an increase in brown energy consumption exhausted resource productivity from the lower to the upper quantiles. In contrast, green energy utilisation enhanced resource productivity from the lower to the higher quantiles. Also, while human capital adversely affected resource productivity for both energy means, technology transfer positively impacted it from the lower to the upper quantiles. Likewise, inferences from the DOLS, FMOLS, and D-K techniques revealed similar findings. However, despite non-renewable energy being the dominant means of energy in these developing economies, the size of its adverse impact on resource productivity falls short of the increasing effect of renewable energy across all quantiles. Also, the magnitude of the negative impact of human capital on resource productivity is marginally more substantial with non-renewable energy. In contrast, the robustness of the enhancing impact of technology transfer is slightly more with renewable energy.
... For instance, technology and manufacturing sectors have shown significant increases in market capitalization which has been associated with job growth in these industries. Similarly, reduced business investment may lead to lower market capitalization, reflecting a decline in the overall value of publicly traded companies in a country's stock market (Romer, 1990). Romer (1986) primarily focused on the historical unemployment data series for the United States, analysing the methods used to construct these data and highlighting the spurious volatility present in the pre-1940 period. ...
Issues of unemployment are widespread globally, impacting living standards and economies. It is measured by the proportion of jobless individuals actively seeking employment but unable to find it. Higher unemployment rates signal economic strain which affects both individuals and governments. Coronavirus disease or COVID-19 has led to significant job loss not only in Asia but at a global level. Thus, this study is motivated to compare and investigate the impact of the jobless rate with its factor determinations during the turbulent crisis, especially during the economic crisis and post-COVID-19 pandemic in Asia’s neighbouring region. Secondary data were retrieved from the CEIC Data Global Database for 9 countries based on unbalanced monthly data, from January 2020 to December 2023, and run using pooled OLS, robust and multivariate regressions. Overall, the results show a significant relationship between the jobless rate and its determinants in all countries except Japan and Singapore, consistent with the Philip Curve theory.
... Human capital is given immense importance in the endogenous growth theory which laid great emphasis on internal factors within economy to be more influential factors in impacting economic growth. Knowledge and technological innovation are considered vital factors influencing the production process wherein knowledge is taken to be an input in the production function (5,6). The rationale behind undertaking the study is to acknowledge which level of education has comparatively more influence on the economic growth of India, since as per certain studies it is the primary education which impacts economic growth the most specifically in lesser developed economies (7,8). ...
To attain maximum benefits of the demographic dividend which India can enjoy due to its huge working-age pollution, it is crucial to have a highly educated and skilled labour force. In this context, the current analysis focuses on understanding the potential impact of education on the nation's economic well-being. The study attempts to examine the relationship between education and economic growth of India using time-series data from the period 1980-81 to 2019-20. The dependent variable is Real GDP per capita, while the independent variables include total labour force, gross capital formation and gross enrollment ratios at the primary, secondary, and higher education levels, with labour force and gross capital formation as control variables. The study employs the Autoregressive Distributed Lag (ARDL) methodology to explore the dynamics of the association among the concerned variables in short and long run. In the short run, gross capital formation and primary education show a positive and significant relationship with India's economic growth. ARDL Bounds test confirms the existence of a long run relationship existing between economic growth and the independent variables. Secondary and higher education are found to have statistically significant impact on economic growth of India in the long run which discloses the relevance of education for economic well-being of the nation. Consequently, it is recommended that the government focuses on promoting post-elementary education.
... technological progress support economic expansion. Romer (1990) developed a model that proposed that technological developments are the primary cause of higher productivity, which in turn leads to the creation of new products and systems that promote economic expansion. According to the methodology, in order to sustain a higher rate of innovation from the very beginning, a country need to devote a bigger proportion of its resources to research and development. ...
Macroeconomic, Market Performance, WDI, GMM, Pakistan Introduction The intrinsic growth model, the neoclassical growth model, also the new institutional method are all examples of growth models are the three primary phases of advancements in the field that aid in a better understanding of the theoretical modelling techniques employed in the growth literature to account for the aspects that influence economic growth and cross-national variations in it. Labor and capital inputs are the main forces behind economic development, according to Solow's groundbreaking 1956 model of economic growth. Because changes in growth are caused by labor and capital. Savings and capital creation were prominently included in the model as economic drivers. Therefore, this model shows that each nation's unique route of factor accumulations leads to differences and changes in its growth performances. Raj and Breda (2011) claim that despite the anticipation that technology innovation will raise productivity across the board for all production components and spur creative growth in economic activities; this method did not include it into the model. It is considered that technical development comes from outside the system, acting as an external component. This leads to the conclusion that domestic policies are unable to influence growth over the long run rate of the economy. Romer (1986) expanded this model and showed how important incentives are to driving technical development and, in turn, raising the productivity of human and physical capital to achieve steady-state growth. This indicates once over that core advancement strategies may adjust the long-term pace of economic growth. The internal development policies are thus more crucial. The succeeding and better-known modelling application makes use of an endogenic expansion model, that contends that a country's long-term development is determined by elements innate to its economic system. This method lays a lot of emphasis on how creativity, innovation, and This study explores at how Pakistan's market performance is affected by macroeconomic factors from 2014 to 2023. The World Bank's Development Indicators (WDI) dataset and annual reports are the sources of the data. In this research study, the panel data was analyzed using GMM. This research advances the field by using features of macroeconomic variables instead of firm-level elements. The empirical finding demonstrates that macroeconomic factors support non-financial companies' market performance in Pakistan. Companies' operative in Pakistan should be concerned of the possible influence of these factors on market performance and search for new methods to deal with them. The macroeconomic variables effectively enhance market performance. Policymakers and investors need to take these facts into consideration while choices are being made on economic policy and investments.
... This approach places a significant amount of focus on the ways in which creativity, innovation, and technical advancement contribute to the growth of the economy. Romer (1990) produced a model that stated that technical advancements are the fundamental driver of better productivity, which in turn leads to the production of new goods and systems that encourage economic progress. Romer's model was published in 1990. ...
This study explores how financial performance is affected by macroeconomic factors in India non-financial firms from 2013 to 2022. The World Bank's Development Indicators (WDI) data set and annual reports are the sources of the data. In this research study, the panel data was analyzed using GMM. This research advances the field by using features of macroeconomic variables instead of firm-level elements. The empirical finding demonstrates that macroeconomic factors support non-financial companies' financial performance operating in India. Companies' operative in India should be concerned of the possible influence of these factors on financial performance and search for new methods to deal with them. The macroeconomic variables effectively enhance financial performance. Policymakers and investors need to take these facts into consideration while choices are being made on economic policy and investments.
... In times of economic crises, Keynesian economists argue that governments should prioritize expansionary fiscal policies, avoiding the pitfalls of austerity, and investing in the public goods that will drive future growth. Furthermore, the endogenous growth theory posits that economic growth is primarily driven by internal factors within an economy, particularly investments in human capital, innovation, and knowledge (Romer, 1990). These elements are seen as the core engines of growth, as they enhance productivity, foster innovation, and enable economies to improve their output over time without the diminishing returns typical of physical capital accumulation. ...
This research investigates the relationship between fiscal policy and the income gap in Nigeria from 1990 to 2022, utilizing time series data sourced from the CBN Statistical Bulletin and the World Development Indicators. The income gap was measured by the Gini coefficient, while the fiscal policy variables include domestic debt, education expenditure, and health expenditure. The data analysis techniques utilized include the ADF unit root test, bounds cointegration, the autoregressive distributed lag (ARDL) estimation method, and residual diagnostic tests. The ADF unit root tests reveal a combination of I(0) and I(1) series, indicating that the variables are mixed-integrated. Evidence of cointegration was established from the bounds test, suggesting a long-term equilibrium relationship among the variables. The ARDL results reveal that domestic debt and education expenditure have positive and significant effects on income inequality whereas health expenditure has a negative and significant effect on inequality in the long run. Based on the findings, this study recommends that the Nigerian government should carefully manage and possibly restructure its domestic debt while ensuring adequate monitoring of how education funds to are distributed and utilized; and increasing the budgetary allocation to health to minimize the growing income gap, especially among the most vulnerable segments of the population.
... Human capital is given immense importance in the endogenous growth theory which laid great emphasis on internal factors within economy to be more influential factors in impacting economic growth. Knowledge and technological innovation are considered vital factors influencing the production process wherein knowledge is taken to be an input in the production function (5,6). The rationale behind undertaking the study is to acknowledge which level of education has comparatively more influence on the economic growth of India, since as per certain studies it is the primary education which impacts economic growth the most specifically in lesser developed economies (7,8). ...
To attain maximum benefits of the demographic dividend which India can enjoy due to its huge working-age pollution, it is crucial to have a highly educated and skilled labour force. In this context, the current analysis focuses on understanding the potential impact of education on the nation's economic well-being. The study attempts to examine the relationship between education and economic growth of India using time-series data from the period 1980-81 to 2019-20. The dependent variable is Real GDP per capita, while the independent variables include total labour force, gross capital formation and gross enrollment ratios at the primary, secondary, and higher education levels, with labour force and gross capital formation as control variables. The study employs the Autoregressive Distributed Lag (ARDL) methodology to explore the dynamics of the association among the concerned variables in short and long run. In the short run, gross capital formation and primary education show a positive and significant relationship with India's economic growth. ARDL Bounds test confirms the existence of a long run relationship existing between economic growth and the independent variables. Secondary and higher education are found to have statistically significant impact on economic growth of India in the long run which discloses the relevance of education for economic well-being of the nation. Consequently, it is recommended that the government focuses on promoting post-elementary education.
... Podstawowe znaczenie w tym nurcie mają koncepcje biegunów wzrostu oraz rdzeni i peryferii, stanowiące fundament nurtu teorii rozwoju nierównomiernego wskazującego na prawidłowości jego polaryzacji i dyfuzji [Hägerstrand, 1951[Hägerstrand, , 1952Isard, 1960;Boudeville, 1964;Friedman, Alonso, 1964;Paelinck, 1965;Friedmann, 1967;Hägerstrand, 1967;Boudeville, 1972]. Aktualny dyskurs teoretyczny dotyczący terytorialnej składowej rozwoju bazuje na trzech głównych koncepcjach teoretycznych [Churski i in., 2020]: (1) teorii rozwoju endogenicznego zasadniczo zmieniającej ekonomiczną interpretację oddziaływania czynników rozwoju i jej adaptację do wyjaśniania prawidłowości rozwoju [Romer, 1986[Romer, , 1990[Romer, , 1994Lucas, 1988], której genezę na gruncie geografii ekonomicznej, należy wiązać z teorią regionu społeczno-ekonomicznego; ...
Streszczenie: Celem rozdziału jest przedstawienie znaczenia dorobku teoretyczno-metodologicznego geografii społeczno-ekonomicznej i gospodarki przestrzennej w diagnozowaniu i wyjaśnianiu przyczyn przestrzennych zróżnicowań rozwoju, a także w programowaniu działań interwencyjnych podejmowanych w ramach podejścia zorientowanego terytorialnie, które obecnie jest podstawą paradygmatu polityki spójności Unii Europejskiej. Rozdział został podzielony na cztery części. We wprowadzeniu przedstawiono wyzwania i szanse rozwojowe dyscypliny geografia społeczno-ekonomiczna i gospodarka przestrzenna, zwracając uwagę na dyskusję na temat znaczenia terytorium i przestrzeni we współczesnych procesach rozwojowych. W drugiej części rozdziału w syntetyczny sposób zaprezentowano genezę terytorialnej składowej rozwoju podkreślając w jej podstawach teoretycznych dorobek geografii społeczno-ekonomicznej i gospodarki przestrzennej. Trzecia część rozdziału prezentuje podstawowe założenia i aktualną ewolucję polityki rozwoju zorientowanej terytorialnie (place-based policy) podkreślając w nich szanse dla rozwoju funkcji poznawczych i praktycznych geografii społeczno-ekonomicznej i gospodarki przestrzennej. Rozdział kończy podsumowanie zawierające wnioski i rekomendacje dotyczące możliwości wzmacniania roli geografii społeczno-ekonomicznej i gospodarki przestrzennej w praktyce polityki spójności.
... Obtained finding suggest that there is no granger causality between FDI and economic growth. [37] studying the BRICS economies, found no evidence of causality between FDI and GDP, like a few other studies [38] and [39]. [40] Using panel data from selected West African Countries from 1990 to 2016, study the causal relationship between FDI and economic growth. ...
This paper sought to examine the causality nexus of Foreign Direct Investment (FDI) and Economics Growth in Tanzania. Specifically, the research aim to assess the impact of FDI to manufacturing, agricultural and service sectors. Moreover, the study employed time series data from 1993 to 2023. FDI inflow is always considered an important economic growth catalyst in developing economies. Neoclassical growth theories proposed that FDI enhances economic growth by augmenting capital stock and technology. According to the neoclassical models, FDI does not enhance the long-run growth rate but instead is related to the output level. Autoregressive Distributed Lags (ARDL) models was employed to determine the long-run and causal relationship between variables of interest in all three models of the study. The findings of the manufacturing output model suggest that FDI has positive and statistically significance effect to manufacturing sector in both short run and long run. In agriculture and service sector models only short run estimation was captured due to lack of co-integration pattern among variables. The findings indicated a positive and statistical significant unidirectional causality running from FDI to both agricultural and service sectors output. Based on the findings of the study the policy implication is that Tanzania should emphasize FDI-led growth policies to enhance sustainable economic growth to realize the desired economic objectives at the macro level.
... Education and the economic growth of a country have a significant connection due to improvement in human capital, which is more relevant to technology and physical capital (Blaug, 1976;Gylfason, 2001;Nelson & Phelps, 1966;Wolff, 2000). According to Schiff and Wang (2004), the promoting effect of education on the economy was mainly reflected in the following aspects: education changed production technology (Romer, 1990); education made the workforce more receptive to advanced technology from abroad (Hall & Jones, 1999); and education was conducive to transforming resources into a technological power in economic development . Investment in human capital is the same as investment in physical capital and its rate of return can be measured and conceptualized. ...
Education is considered a key element in the formation of human capital, associated with the sustainable development of a country’s economic growth. The study has investigated the relationship between education and Pakistan’s economic growth in the short as well as long run. For measurement, thirty years of data spanning from 1987 to 2016 was used in the study. The data was retrieved from World Development Indicators (WDI) and the Pakistan Bureau of Statistics (PBS). Economic growth was measured from real GDP while education was measured by total years of formal education and government expenditures for education. Pesaran bounds test approach and ARDL model for long and short-run co-integration were applied. The results deduced from the study described that by increasing the labor force education, the real GDP increases with the existence of significant and positive co-integration and confirmed the long-term relationship. It is observed that by increasing the 1% of labor force education, there is a 0.62% increase in real GDP (economic growth) in long run. On the other hand, the results also described the significant and negative co-integration relation between government education expenditures and economic growth (real GDP) in long run. The appearance of this negative relation in results is probably due to the unavailability of total educational expenditures as in this study the education of the labor force increases with decreasing trends in government educational expenditures. This study may be helpful for policymakers in educational policy formulation to enhance the government educational expenditure for improving the education standard of the labor force to boost Pakistan’s economic growth.
IMPACT STATEMENT
FDI is a critical source of capital for many countries globally, particularly for those lacking sufficient funds to foster economic growth while safeguarding the environment. However, most FDI-receiving countries are still struggling to enhance their ability to attract and absorb this capital. To address this issue, this study aims to analyze the impact of FDI on green GDP in the ASEAN-6 countries and also to clarify the moderating role of financial development thresholds in this impact. The first key finding reveals that FDI has a positive impact on green GDP in the ASEAN-6 countries, affirming the importance of FDI in promoting green GDP there. Second, the results reveal the existence of threshold values for both the financial market development and financial institution development indices. The positive effect of FDI on green GDP only becomes evident when financial development exceeds these values. Notably, financial institutions show a more effective role than financial markets in amplifying the impact of FDI on green GDP. These findings suggest that the ASEAN-6 countries should make more efforts to attract FDI while simultaneously improving their domestic financial systems to enhance their capacity to absorb this capital. The findings also provide valuable empirical evidence for researchers in this field. Additionally, the study offers meaningful insights for policymakers in the ASEAN-6 countries to identify suitable economic policies aimed at improving FDI absorption capacity, thereby boosting green GDP growth.
Addressing income inequality in Sub-Saharan Africa (SSA) requires a comprehensive approach that tackles the region's underlying structural challenges, including limited access to quality education and the need for inclusive economic growth. Education and foreign direct investment (FDI) are critical drivers of economic mobility that can help break the cycle of intergenerational poverty in developing regions, enhance the quality of education mitigate skill mismatches in the labour market, supported by increased public spending on education and foreign investment inflows to reduce unemployment. Our study investigates the dynamic relationship between government education spending and FDI, and their impact on income inequality in 36 Sub-Saharan African countries from 1995 to 2021. The results reveal that while FDI significantly reduces income inequality, government spending on education tends to increase it. Furthermore, basic education enrolment exacerbates income disparities in the region, though a growing labour share mitigates inequality. Findings suggest the need for policies that encourage FDI inflows and educational initiatives that aim to enhance skills and expand the educated workforce.
In business, a value chain is a system of information, organisations, resources, people and activities, that creates and supplies a product or service to a customer while adding value at each stage. An innovation impact value chain needs to add value to consumers, businesses, society and a nation’s economy and our environment. Ultimately, creating value for end-users and customers through innovation is a goal that can literally save and transform lives, generate high value business, employment, tax revenues and economic growth of a nation. How, and the extent to which, this is achieved in monetary terms and other forms of value is explored; how it is measured and dependent on science-related patents, in particular, is addressed.
Knowledge generated through research is the key currency of innovation, but does it have a definable value and if so in what way and can such value be maximised? This chapter moves from a consideration of the research process in earlier chapters to focussing on the value and impact in terms of the research outputs—particularly those that are most relevant to innovation. A comparison is made between the value of conventional research published in scientific journals and the added value and impact achieved through publication as patents or other intellectual property—and why it really matters!
The study examined the Impact of Investment Climate on Foreign Direct Investment in Nigeria, Ghana, Kenya and South Africa, for the period of 2000 to 2021. The focus of this study is on how the business environment in Nigeria, Ghana, Kenya and South Africa influences foreign direct investment. Specific goals are as follows: (i). Evaluate critically the effect of the economic investment climate in Nigeria, Ghana, Kenya and South Africa on the inflow of FDI The variable scope include economic investment climate (ease of doing business index, gross domestic product, inflation rate), political investment climate (political stability index, corruption perception index, quality of institutions), environmental investment climate (nitrous-oxide emission, population density, land/air pollution rate) as the independent variable. The dependent variable was foreign direct investment inflows. Time series analysis, and more specifically the multiple panel regression analysis method, was used in analyzing the data adopting the Cobb Douglass model for its theoretical framework and data was sourced from the Statistical Bulletin of the countries studied and the World Bank Statistics.\The results show that, Economic investment climate variable (GDP) had significant positive effect on the inflow of foreign direct investment into Nigeria, Ghana, Kenya and South Africa. While inflation have positive insignificant relationship with FDI; It was recommended that; Efforts should be made by the governments of Nigeria, Ghana, Kenya and South Africa to enhance their economic fortunes by strengthening their economy through engaging in massive production for exports which will boost economic growth and as well attract more foreign direct investment
The objective of this study is to evaluate non conventional perspectives. This research aims to unveil the relationships between overall employment performance and other different factors that i and similarities present across various economic regions by adopting an employment purpose, a research covering a decade was conducted in specific growth and unemployment trends within Türkiye, a nation often classified as developing.The data encompasses the years 2010 to 2020. Data beyond 2020 were not included in the study by virtue of the unpredict Covid-19 pandemic. In order to avoid data loss in the study, missing data were interpolated based on time series analysis. Additionally, the data were transformed to achieve stationarity and freed from autocorrelation effects. Through causality analysis, empirical findings were obtained at a relatively micro level by pinpointing factors demonstrating a causal relationship with employment.Based on the research findings, employment performance displays regional variation independent of the factors such as local dynamics to each region. Observations reveal that in underdeveloped countries lacking geographical homogeneity, regional micro Therefore, there's an increasing emphasis on decision attention to local economic regions before making pivotal economic decisions.This article questions the establish relationship between employment factors that coincide with employment performance by considering sectoral diversity and demographic structure
IMPACT STATEMENT
Productivity plays a crucial role in the economic and social progress of nations. Economic growth in the GCC countries faces numerous challenges, including fluctuating oil prices, the rapid growth of the working-age population, stagnant productivity in the public sector, and geopolitical risks in the region. These challenges have made it increasingly difficult for these countries to rely heavily on oil revenues, highlighting the importance of transitioning to an economic model that emphasizes sustainable sources of growth. This shift involves raising productivity to create new economic dynamism, diversify income sources, and respond effectively to current and future market changes. In this study, we focus on Total Factor Productivity (TFP) analysis for several reasons: TFP is often interpreted as a measure of technological progress or innovation; it reflects better management practices; it can be used to assess the impact of various policies on economic efficiency; changes in TFP can help in understanding the sources of economic fluctuations and resilience; and it indicates the quality of policies and institutions that are fundamental to economic growth. By emphasizing TFP, the GCC countries can align their strategies with long-term visions such as Saudi Arabia's Vision 2030 and the UAE's Centennial 2071.
This paper delves into the impact of capital accumulation, effective employment, and total factor productivity (TFP) on the economic growth of five Southeastern European countries: Albania, Croatia, North Macedonia, Serbia, and Slovenia. The examination is based on the Solow-Swan neoclassical growth model and the Cobb-Douglas production function, which dissects economic growth into capital, labour, and productivity inputs. The analysis pays particular attention to the growth dynamics of North Macedonia over the entire period (1998-2019) and two sub-periods (1998-2008 and 2009-2019). The article seeks to provide a comprehensive evaluation of the primary drivers of economic growth in Southeastern European countries, emphasising the evolving roles of capital, labour, and productivity over time. Through a detailed analysis of these determinants, the study offers insights into the necessary policy actions to ensure sustainable long-term growth, especially in transition economies. The empirical analysis utilises the growth accounting framework and employs regression analysis to estimate the output elasticities of capital and labour inputs. The data analysis covers the period of 1998-2019, specifically focusing on two sub-periods to investigate shifts in growth drivers over time. Each factor's contributions are presented in absolute terms (percentage points) and relative terms (percentages) to provide a comprehensive understanding of their roles. The findings indicate that capital accumulation has been the predominant growth driver in most countries, especially Albania, Croatia, and North Macedonia. However, in Serbia and Slovenia, total factor productivity (TFP) played a more significant role, contributing substantially to growth. In North Macedonia, TFP showed strong contributions during 1998-2008 but declined sharply in 2009-2019, leading to increasing reliance on capital and labour inputs for growth. This study is valuable in emphasising the shift in growth drivers over time and highlighting the importance for Southeastern European countries to concentrate on productivity enhancements, innovation, and labour market reforms to sustain long-term growth. These findings provide significant insights for policymakers seeking to improve economic performance in transition economies.
Cet article explore la relation entre la taille optimale du secteur public et la croissance économique en République Démocratique du Congo (RDC). En utilisant un modèle de croissance endogène, nous analysons l'impact des dépenses publiques sur le produit intérieur brut (PIB), tout en tenant compte des effets non linéaires et des seuils critiques. Les résultats indiquent qu'une taille optimale des dépenses publiques est de 12,9 % du PIB, tandis que le seuil d'endettement optimal est de 24,14 % du PIB. Ces seuils sont essentiels pour maximiser l'effet positif des dépenses publiques sur la croissance économique. L'article met également en avant l'importance d'une allocation efficace des ressources publiques pour soutenir le développement économique, tout en soulignant les défis structurels uniques auxquels la RDC est confrontée. En fin de compte, cette recherche vise à fournir des recommandations basées sur des données probantes pour aider la RDC à élaborer une politique de dépenses publiques qui favorise une croissance durable et inclusive.
Mots-Clés : Dépenses publiques, Croissance économique, Endettement, Formation brute du capital fixe.
ABSTRACT
This article explores the relationship between the optimal size of the public sector and economic growth in the Democratic Republic of Congo (DRC). Using an endogenous growth model, we analyze the impact of public spending on gross domestic product (GDP), while accounting for non-linear effects and critical thresholds. The results indicate that the optimal size of public spending is 12.9% of GDP, while the optimal debt threshold is 24.14% of GDP. These thresholds are essential to maximize the positive effect of public spending on economic growth. The article also highlights the importance of efficient allocation of public resources to support economic development, while highlighting the unique structural challenges facing the DRC. Ultimately, this research aims to provide evidence-based recommendations to help the DRC develop a public expenditure policy that promotes sustainable and inclusive growth.
Keywords: Public spending, Economic growth, Debt, Gross fixed capital formation.
استهدفت الدراسة التعرف عمليا على تأثير كل من: الاستثمار المحلي، ورأس المال البشري، والصادرات والتمويل الوسيط والنمو الاقتصادي على تدفق الاستثمار الأجنبي المباشر (FDI) على دول جنوب شرق آسيا: أندونيسيا، ماليزيا، تايلند، سنغافورة، والفلبين، حيث استخدمت الدراسة منهجية حديثة لتحقيق هذا الهدف، ألا وهي منهجية Autoregressive Distributed Lag Approach (ARDL)، وذلك للتعرف على تأثير كل من هذه المتغيرات السابقة على الاستثمار الأجنبي المباشر في المدى القصير و المدى الطويل خلال الفترة الزمنية (1968- 2002). النتائج العملية لهذه الدراسة يمكن تلخيصها فيما يلي: (1) وجود علاقة مباشرة فيما بين الاستثمار الأجنبي ومحدداته التي سبقت الإشارة إليها. (2) النمو الاقتصادي والاستثمار المحلي لهما تأثير إيجابي على زيادة تدفق الاستثمار الأجنبي المباشر إلى دول جنوب شرق آسيا. (3) تطوّر كل من القطاع المالي ورأس المال البشري وتنميته لهما تأثير مهم في عملية جذب الاستثمار الأجنبي. (4) سياسة تشجيع التصنيع لغاية التصدير مع الاستقرا في سعر صرف العملة المحلية يسهمان في تشجيع الاستثمار الأجنبي. كما أوصت الدراسة بتشجيع الاستثمار الأجنبي المباشر جنبا إلى جنب مع الاستثمار المحلي؛ و ذلك لإعادة النمو الاقتصادي في دول جنوب شرق آسيا إلى ما كان عليه قبل الأزمة المالية 1997.
This study compares the relationships between important macroeconomic variables and outward foreign direct investment (OFDI) in the economies of the BRICS and N-11 countries between 1990 and 2019. The analysis employs a comprehensive econometric framework, with ordinary least squares (OLS) serving as the baseline model, followed by three-stage least squares (3SLS) to account for simultaneous relationships, and the generalized method of moments (GMM) for the robustness check to handle any endogeneity. The primary macroeconomic factors that are examined are GDP, financial development, trade openness, technological advancement, human capital, and inward foreign direct investment. The empirical results verify that, in both groups of economies, OFDI has a long-term positive and significant correlation with GDP, financial development, and trade openness. GDP is also identified as a critical outcome variable in the 3SLS model, which shows that higher GDP levels are associated with increased trade openness, financial development, and OFDI. There is conflicting evidence regarding the magnitude and statistical significance of these associations, and their direction and strength differ among models and country groups. These results demonstrate the intricate relationship between OFDI and macroeconomic factors, emphasizing the necessity of distinct policy strategies adapted to the institutional and structural realities of the N-11 and BRICS economies.
Cet article propose une extension du modèle de croissance de Solow en y intégrant l'énergie (E) comme facteur de production supplémentaire, en plus du capital (K) et du travail (L). Cette approche permet d'étudier l'impact des variations d'énergie sur les taux de croissance économiques, en lien avec l'effet Khazzom-Brookes, selon lequel une augmentation de l'efficacité énergétique peut paradoxalement entraîner une augmentation de la consommation d'énergie. Les résultats obtenus démontrent l'importance de considérer l'énergie dans les modèles de croissance pour mieux appréhender les dynamiques économiques contemporaines.
This study examines trade openness, hydroelectric power production, and foreign direct investment (FDI) nexus on economic growth in Nigeria. Despite efforts toward trade liberalisation, Nigeria’s growth remains constrained due to heavy reliance on oil and minerals exports. Furthermore, electricity production challenges exacerbate these issues, hindering intra-African trade, FDI inflows, and overall economic growth. The study explores how trade openness and insufficient electricity production affects economic growth in the long run. The annual data from 1988 to 2022, sourced from the National Bureau of Statistics, Nigeria, Our World in Data, and the World Bank Development Indicator (WDI) database was used. The econometric techniques employed are the autoregressive distributed lag (ARDL) to examine long-run and short-run dynamics, while the dynamic ordinary least squares (DOLS) is used as a robustness to address potential endogeneity and serial correlation concerns. The findings indicate that trade openness positively affects long run economic growth, as supported by DOLS estimates. However, hydroelectric power production and FDI had mixed effects on Nigeria's economic performance. The study recommends prioritising investments in electricity infrastructure to enhance trade competitiveness and attract FDI. Moreover, diversifying exports beyond oil and minerals is crucial for strengthen economic resilience and drive sustainable development in Nigeria.
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