Does global economic reform accentuate technological innovation? A comparative evidence around the world

Abstract

Technology innovation improves efficiency, gives society new and enhanced goods and services through economic reform, and raises their living conditions. This study examined the impact of economic reform on technological innovation using the system generalised method of moments and panel quantile regressions to account for simultaneity and reverse causality. The empirical findings conclude that economic reform significantly impacted technological innovation in 79 nations from 1995 to 2017. More importantly, we verify the positive effect of economic reform on technological innovation by addressing endogenous and robustness checks via various methods and sub-samples. Furthermore, the mechanism of this relationship was explored. Therefore, the research findings offer an alternative method for national ”gove’nments to promote innovation output by reinforcing government effectiveness, financia” sec’or development, and the degree of democracy transparency. Finally, economic proposals are discussed based on the findings and estimation strategies.

HIGHLIGHTS

• The study examines the impacts of economic reforms on technological innovation in a panel of 79 economies over 1995–2017.

• Using GMM and panel quantile regressions, empirical findings indicate that economic reforms promote technological innovations.

• The positive effect of economic reforms on innovation operates through government effectiveness, financial development, and democracy.

• Intellectual Patent Protection Act controls inadequate competitiveness and preserves a fair market climate.

Keywords:

• Economic reforms
• technological innovation
• panel data
• government effectiveness
• financial sector development

JEL CLASSIFICATION:

• H3; O3; G20; H11; C15

Acknowledgement

Jun Wen is grateful to the National Natural Science Foundation of China for the Project: Does Global Economic Reforms Accentuate Technological Innovation? A Comparative Evidence Around the World. A Comparative Evidence Around the World (grant number: 72074176).

Author contributions

JW: visualisation, Investigation, Supervision, Funding acquisition. CVO: conceptualisation, data curation, software, formal analysis, investigation, methodology, writing—original draft, writing—review & editing, resources.

Disclosure statement

The authors state that they have no established conflicting financial interests or personal relationships that may have affected the work described in this article.

Additional information

Funding

Jun Wen is grateful to the National Natural Science Foundation of China for the Project: Does Global Economic Reforms Accentuate Technological Innovation? A Comparative Evidence Around the World. A Comparative Evidence Around the World (grant number: 72074176).