Innovation and Economic Growth E-Book

Philipp Jan Siegert

• Herausgeber: GRIN Verlag
• Sprache: Englisch

Veröffentlichungsjahr: 2004

Beschreibung

Bachelor Thesis from the year 2004 in the subject Economics - Innovation economics, grade: A, University of Groningen (International Economics & Business), language: English, abstract: Research questions The fact that some countries show higher growth rates than others has long been observed in the global economy. Even within the OECD area, where countries are regarded as being relatively homogeneous, growth levels differ remarkably. This leads inevitably to the question how different growth rates can be reconciled and what factors are responsible for different growth rates. The purpose of this thesis is to examine one of the factors, besides the classical input factors labour and capital, that is often regarded to play a significant role in economic growth namely innovation. After a theoretical introduction in the first section of this thesis, the second section reviews principal earlier studies about the effect of innovation on economic growth to provide a methodological overview. In section three, research and development (R&D) expenditures (taken as a proxy for innovation) among 15 OECD countries are evaluated in the period 1973 – 1998 to analyse how the technology stock of these countries developed relative to their GDP growth and to answer the question which countries performed relative well with respect to innovation and which countries lag behind. Section four analyses the impact of innovation on economic growth by econometrically testing a neoclassical growth model where innovation is endogenized. The purpose of this econometric analysis is to show how much economic growth can be accounted to innovation when compared to the classical input factors capital and labour. Section five focuses on recent policy actions undertaken in the European Community to support innovation. The section analyses possible policy responses to the innovation phenomenon with respect to the European Community. Section six contains brief concluding remarks.

Leseprobe

Table of Content

1 Introduction

1.1 Research questions.

1.2 The Term 'Innovation'

1.3 Theoretical Background.

2 Principal Earlier Studies.

2.1 Introductory Discussion.

2.2 Four Empirical Studies

3 Comparison of Technology Stocks among 15 OECD Countries

3.1 Introduction.

3.2 Interpretation

3.3 A European Technology Stock Map.

4 Econometric Analysis.

4.1 Introduction.

4.2 The Model

4.3 Econometric Challenges

4.4 Interpretation

5.1 Introduction.

5.2 Weaknesses of Europe’s Innovation Activities.

5.3 Diversity and Convergence

5.4 Policy Actions Undertaken in Europe.

6 Conclusions

Appendix I - Data Sources.

Output (GDP)

Labour Stock

Capital Stock

Technology Stock

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INNOVATION AND ECONOMIC GROWTH: EMPIRICAL RESULTS AND POLICY ACTIONS IN EUROPE

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As with every piece of work I have undertaken, there are people I especially want to thank for their support. For the support in writing this thesis as well as in motivating me to do further academic research I would first like to thank Dr. B. L., my content supervisor, who provided me with excellent support over the whole period of this thesis. He was always a competent and very helpful person I could consult in case of problems and questions. Second, I want to thank Dr. E. L., my process supervisor, for accompanying me on the first steps of this thesis and the research proposal. The meetings with the small Bachelor thesis group supervised by Erik at the beginning of this semester were very supportive and interesting. Third, I am grateful to my friends Anselm Mattes, Michael Fuller, Arne Heutink and Ipek Özer who reviewed this thesis and provided me with useful comments. Fourth, the whole Bachelor thesis group has to be thanked as everyone provided interesting comments and helped to support each other.

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Innovation and Economic Growth

1 Introduction

1.1 Research questions

The fact that some countries show higher growth rates than others has long been observed in the global economy. Even within the OECD area, where countries are regarded as being relatively homogeneous, growth levels differ remarkably. This leads inevitably to the question how different growth rates can be reconciled and what factors are responsible for different growth rates. The purpose of this thesis is to examine one of the factors, besides the classical input factors labour and capital, that is often regarded to play a significant role in economic growth namely innovation. After a theoretical introduction in the first section of this thesis, the second section reviews principal earlier studies about the effect of innovation on economic growth to provide a methodological overview. In section three, research and development (R&D) expenditures (taken as a proxy for innovation) among 15 OECD countries are evaluated in the period 1973 - 1998 to analyse how the technology stock of these countries developed relative to their GDP growth and to answer the question which countries performed relative well with respect to innovation and which countries lag behind. Section four analyses the impact of innovation on economic growth by econometrically testing a neoclassical growth model where innovation is endogenized. The purpose of this econometric analysis is to show how much economic growth can be accounted to innovation when compared to the classical input factors capital and labour. Section five focuses on recent policy actions undertaken in the European Community to support innovation. The section analyses possible policy responses to the innovation phenomenon with respect to the European Community. Section six contains brief concluding remarks.

1.2 The Term 'Innovation'

Innovation is a multi-dimensional phenomenon, not easy to define. Therefore, it became necessary to find a definition for fitting to the content of this thesis. I opted for the definition of the Oslo Manual that was compiled by the OECD (1992, 1996), and that defines innovation as: