Incidence of innovation and institutional quality on economic growth, an analysis with panel data for countries classified by their income level.

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Published: Jul 17, 2022
DOI: https://doi.org/10.54753/rve.v10i2.1347
Keywords:
Crecimiento económico, Innovación, Instituciones y crecimiento, Endógeno, Estimación de variables Instrumentales

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José Luis Romero-Capa
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador
Diana Martínez
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador
Juan Encalada
Carrera de Administración de Empresas, Universidad Nacional de Loja, Loja, Ecuador
Jose Vicente Ordoñez
Carrera de Economía, Universidad Nacional de Loja, Loja, Ecuador

Abstract

The low rates of economic growth are directly related to the falls in production, which is why innovation and a regulatory framework that protects the productive apparatus are essential, the objective of this research is to determine the incidence of innovation and institutional quality in economic growth according to the income level of the countries through a correlation and causality analysis using the Ordinary Least Squares (OLS) method, in an endogenous growth model. The databases used are: World Development Indicators (WDI ), Worldwide Governance Indicators (WGI) and Penn World Table (PWT). The main results found are a positive relationship between the variables except in the case of low-income countries in which the relationship between institutional quality and economic growth is negative, a bidirectional causal relationship was also verified for all the variables with the exception of the capital stock which indicates causality in economic growth without a round trip effect. In short, countries should focus their education on applied research that generates patents, and policies aimed at strengthening democracy in low- and lower-middle-income countries should also be worked on and strengthened.

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How to Cite
Romero-Capa, J. L., Martínez, D., Encalada, J. ., & Ordoñez, J. V. . (2022). Incidence of innovation and institutional quality on economic growth, an analysis with panel data for countries classified by their income level. Revista Económica, 10(2), 82–95. https://doi.org/10.54753/rve.v10i2.1347
Issue
Vol. 10 No. 2 (2022): RVE vol 10 (July-December 2022)
Section
RESEARCH ARTICLES
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