The impact of knowledge diffusion on economic growth across countries

•Improved capability to access innovation and knowledge has a positive and significant effect on economic growth.•It also fosters technological catch-up process for developing countries and promotes economic convergence.•Economic convergence is even greater when democracy is well developed in develo...

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Bibliographic Details
Published in:World development 2020-08, Vol.132, p.104995, Article 104995
Main Authors: Perez-Trujillo, Manuel, Lacalle-Calderon, Maricruz
Format: Article
Language:English
Subjects:
Access
Conditional convergence
Convergence
Democracy
Developing countries
Economic development
Economic growth
Economics
Growth models
Impact analysis
Innovations
Internet
Knowledge diffusion
LDCs
Panel data
Panel data model
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Summary:•Improved capability to access innovation and knowledge has a positive and significant effect on economic growth.•It also fosters technological catch-up process for developing countries and promotes economic convergence.•Economic convergence is even greater when democracy is well developed in developing countries.•‘Leapfrogging Hypothesis’ holds since the impact is greater in developing countries. The aim of this paper is to examine theoretically and empirically the impact of improvement in the capability to access innovation and knowledge on economic growth and convergence among countries. Our results, obtained using an augmented Solow-Swan growth model and panel data methodology with a sample of 138 countries for the period 1990–2014, show not only that improvement in the capability to access innovation and knowledge (proxied by percentage of internet users) has a positive impact on said economic growth, fostering the technological catch-up process for developing countries and accelerating the pattern of economic convergence, but also that this improvement has an even greater effect on developing countries when democracy is well developed, accelerating the pattern of economic convergence even further.
ISSN:0305-750X
1873-5991
DOI:10.1016/j.worlddev.2020.104995