Knowledge creation and economic growth: the importance of basic research

Figures & data

Table 1. Literature review summary.

Author (Year)	Period	Case study	Methodology	Results
Jin (2009)	Asia	1969–2004	Granger causality	Causality is mixed and insignificant for Singapore
Jin (2010)	Japan	1970–2004	Granger causality Vector Autoregressive (VAR) model	Causality from economic growth to publications.
Lee et al. (2011)	Developed and emerging countries	1981–2007	Causality	Mutual causality for Asian countries. Unclear for Western countries.
Inglesi-Lotz and Pouris (2013)	1980–2008	South Africa	ARDL	A long-run relationship is confirmed for individual fields of science
Jin and Jin (2013)	Multiple countries	1975–2003	Regression analysis	Positive effect
Brenner (2014)	114 countries	1974–2009	GMM technique	Positive effect
Gholizadeh et al. (2014)	ASEAN countries	1996–2011	Spearman Correlation analysis	Positive correlation
Inglesi-Lotz et al. (2014)	United States	1981–2011	Bootstrap causality analysis	Unidirectional causality from research output to GDP
Jin and Jin (2014)	34 developed countries	1975–2003	Regression analysis	Positive effect
Inglesi-Lotz et al. (2015)	1981–2011	BRICS countries	Panel causality test	Neutrality for all countries except for India
Kim and Lee (2015)	Asia and Latin America	1960–2005	Panel data analysis	Publication does not matter for economic growth
Ntuli et al. (2015)	34 OECD countries	1981–2011	Bootstrap causality analysis	Causality from research output to growth in some countries and the opposite for some. No causality for other countries.
Yaşgül and Güriş (2016)	Turkey	1981–2013	Bootstrap Granger causality test	Research output Granger causes GDP
Hatemi-J et al. (2016)	G7 countries	1981–2012	Asymmetric causality	Positive effect on GDP in the UK only
Kumar et al. (2016)	China and USA	1981–2012	ARDL Toda and Yamamoto causality test	Positive effect for both. Bidirectional causality for China and unidirectional causality from output to publications in the US
Odhiambo and Ntenga (2016)	South Africa	1986–2012	ARDL technique Granger non-causality	Unidirectional causality from publications to economic growth in the long-run and short-run
Solarin and Yen (2016)	1996–2013	161 countries	Generalised Method of Moments (GMM)	Positive for both developed and developing countries
Tunali (2016)	Europe	1981–2011	ARDL	Positive effect in France and Sweden only
Zaman et al. (2018)	Developed and emerging countries	1981–2011	Panel data techniques	Causality is mixed. Causality from output to publication in OECD countries
Drogovoz et al. (2019)	95 countries	2015	Exploratory analysis Correlation analysis	Insignificant effect on economic growth
Pinto and Teixeira (2020)	65 countries	1980–2016	System GMM	Positive impact especially in fields of engineering and technology, social sciences and physics.
Hausman (2022)	United States	1977–1997	Panel data techniques	Positive effect
Oluwatobi et al. (2020)	SSA	1996–2012	System GMM	Insignificant effect due to low institutional
Pradhan et al. (2020)	Eurozone	2001–2016	Panel Granger causality Vector Error Correction Model (VECM)	Positive effect
Wang et al. (2020)	China	2005–2017	Spatial Panel data model	Positive effect
Agasisti and Bertoletti (2020)	284 European regions	2000–2017	System GMM	Quality of research and specialisation in teaching STEM important
Anakpo and Oyenubi (2022)	Southern Africa	2004-2017	Panel Dynamic Ordinary Least Squares	Positive effect
Bertoletti et al. (2022)	649 NUTS-3 in 29 countries	2014–2016	Random forest and GMM	Positive effect
Ogot and Onyango (2022)	Kenya	2015–2016	Least squares (no causal analysis)	Positive effect

Table 2. Data description.

Variable	Description
Economic growth (GDP)	Economic growth is represented by GDP.
Knowledge (KNW)	Knowledge is proxied by the number of journal articles published by a country. The variable includes total articles published and the number of STEM publications.
Inflation (INF)	Inflation is percentage change in consumer price index
Investment (INV)	Gross fixed capital formation as a percentage of GDP
Trade (TRA)	Exports plus imports as a percentage of GDP
Foreign direct investment (FDI)	Foreign direct investment net inflows as a percentage of GDP
Human capital (EDU)	Mean years of schooling
Institutions (INST)	Level of institutional quality measured by property rights

GDP, INF, INV, TRA and FDI are sourced from the World Bank. KNW is sourced from Scopus, EDU is sourced from the UNDP and INST is sourced from the Heritage Foundation.

Table 3. Descriptive statistics.

Variable	All countries	Developed	Emerging	Africa
GDP	4.511e + 11 (1.649e + 12)	1.169e + 12 (2.773e + 12)	2.763e + 11 (1.036e + 12)	4.693e + 10 (8.634e + 10)
KNW	18520.506 (63572.354)	50119.377 (98970.549)	10372.473 (47843.524)	1479.707 (3704.326)
STEM	11538.956 (38348.117)	29737.747 (54274.681)	7225.74 (34440.509)	998.44 (2411.810)
TRADE	85.666 (55.346)	108.918 (80.321)	83.715 (43.170)	65.063 (28.790)
INF	9.841 (56.631)	2.267 (2.731)	11.45 (38.392)	14.499 (98.472)
FDI	5.45 (17.294)	7.399 (20.715)	5.303 (18.604)	3.734 (8.436)
INV	23.723 (7.245)	23.639 (4.647)	24.564 (7.249)	22.199 (9.009)
INST	51.727 (23.815)	79.539 (13.734)	42.785 (18.907)	39.061 (15.245)
EDU	8.216 (3.100)	11.305 (1.454)	8.245 (2.313)	4.886 (2.127)
Sample size	130	34	63	33

The figures in parenthesis are the standard deviations.

Figure 1. Scatter graphs.

Source: Researchers’ own computations. Note. LGDP is the logarithmic form of GDP, LART is the logarithmic form of total articles published (KNW).

Table 4. PDS Lasso results: total article publications.

	All	Developed	Emerging	Africa
CHS Lasso	0.465 (0.007)*	0.577 (0.012)*	0.477 (0.010)*	0.441 (0.016)*
CHS Post Lasso	0.324 (0.008)*	0.302 (0.017)*	0.338 (0.011)*	0.274 (0.019)*
PDS	0.379 (0.007)*	0.326 (0.016)*	0.434 (0.011)*	0.285 (0.018)*
EDU	0.029		−0.107	0.063
EDU*INST	0.001	0.001	0.005
INV	0.007			−0.011
INV*EDU				0.005
TRADE	−0.001	−0.034	−0.002
INF		−0.001
CONSTANT	21.081	22.758	22.823	21.403
Fixed effects	Yes	Yes	Yes	Yes

*Indicates significance at the 1% level.

Table 5. PDS Lasso results: STEM publications.

	All	Developed	Emerging	Africa
CHS Lasso	0.491 (0.008)*	0.649 (0.013)*	0.507 (0.010)*	0.455 (0.016)*
CHS Post-Lasso	0.347 (0.009)*	0.351 (0.019)*	0.336 (0.012)*	0.277 (0.019)*
PDS	0.399 (0.007)*	0.380 (0.017)*	0.401 (0.012)*	0.291 (0.018)*
EDU	−0.003		−0.029	0.076
EDU*INST	0.001	0.001	0.0003
INV	0.008			−0.010
INV*EDU				0.005
TRADE	−0.001	−0.014	−0.003
INF		−0014
CONSTANT	21.081	22.377	22.351	21.380
Fixed effects	Yes	Yes	Yes	Yes

*Indicates significance at the 1% level.

Table 6. Cluster-Lasso.

	CHS Lasso				CHS Post-Lasso				PDS
	All	Developed	Emerging	Africa	All	Developed	Emerging	Africa	All	Developed	Emerging	Africa
KNW	0.800(0.035)*	0.933 (0.065)*	0.637 (0.050)*	0.556 (0.092)*	0.781 (0.033)*	0.887 (0.088)*	0.621 (0.049)*	0.516 (0.111)*	0.784 (0.033)*	0.984 (0.036)*	0.626 (0.051)*	0.603 (0.092)*
EDU									−0.112
EDU* PROP									0.0001
GFCF* PROP									0.00001
GFCF* INF										0.002
TRADE* INF										−0.0003
CONS									20.055	16.864	20.395	20.032
STEM	0.799 (0.034)*	0.937 (0.074)*	0.666 (0.051)*	0.627 (0.088)*	0.781(0.032)*	0.893 (0.100)*	0.645 (0.051)*	0.617 (0.092)*	0.784 (0.032)*	1.01 (0.041)*	0.652 (0.052)*	0.617 (0.091)*
EDU									−0.091
EDU* PROP									0.0002
GFCF* PROP									−0.0003
GFCF* INF										0.001
TRADE* INF										−0.0002
CONS									20.171	17.123	20.452	20.152

* indicates significance at the 1% level.

Table 7. Instrumental variables Lasso.

	CHS Lasso				CHS Post-Lasso				PDS
	All	Developed	Emerging	Africa	All	Developed	Emerging	Africa	All	Developed	Emerging	Africa
KNW	0.805 (0.034)*	0.932 (0.067)*	0.643 (0.050)*	0.563 (0.093)*	0.786 (0.033)*	0.882 (0.090)*	0.627 (0.050)*	0.523 (0.113)*	0.788 (0.032)*	0.969 (0.045)*	0.602 (0.052)*	0.583 (0.102)*
EDU									−0.109
EDU* PROP									0.0001
GFCF* PROP									−0.00002
GFCF* INF										0.001
TRADE* INF										−0.0002
GFCF* EDU												0.002
CONS									20.007	16.999	20.504	19.933
STEM	0.805 (0.034)*	0.938 (0.076)*	0.650 (0.052)*	0.636 (0.089)*	0.786 (0.031)*	0.892 (0.103)*	0.620 (0.050)*	0.626 (0.093)*	0.773 (0.033)*	0.982 (0.051)*	0.618 (0.053)*	0.626 (0.092)*
EDU									−0.082
EDU* PROP									0.0001
GFCF* PROP									−0.00003
GFCF* INF										0.001
TRADE* INF										−0.0002
CONS									20.193	17.315	20.610	20.089

*Indicates significance at the 1% level.

Table

Developed	Emerging	African countries
Australia, Austria, Belgium, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Israel, Italy, Japan, Korea Republic, Latvia, Lithuania, Luxembourg, Netherland, New Zealand, Norway, Portugal, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States	Albania, Argentina, Armenia, Azerbaijan, Bahrain, Bangladesh, Barbados, Belarus, Bolivia, Bosnia and Herzegovina, Brazil, Brunei Darussalam, Bulgaria, Cambodia, Chile, China, Colombia, Costa Rica, Croatia, Dominican Republic, Ecuador, Fiji, Georgia, Guatemala, Haiti, Honduras, Hungary, India, Indonesia, Iran, Iraq, Jamaica, Jordan, Kazakhstan, Kyrgyz Republic, Lao PDR, Lebanon, Malaysia, Malta, Mexico, Moldova, Mongolia, Nepal, Nicaragua, North Macedonia, Oman, Pakistan, Panama, Paraguay, Peru, Philippines, Poland, Romania, Saudi Arabia, Serbia, Sri Lanka, Thailand, Turkey, Ukraine, United Arab Emirates, Uruguay, Uzbekistan and Vietnam	Algeria, Benin, Botswana, Burkina Faso, Cameroun, Congo Republic, Democratic Republic of Congo, Cote d’Ivoire, Egypt, Equatorial Guinea, Eswatini, Gabon, Gambia, Ghana, Kenya, Madagascar, Mali, Mauritius, Morocco, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Sierra Leone, South Africa, Sudan, Tanzania, Togo, Tunisia, Uganda and Zimbabwe

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