The transition from middle-income trap: role of innovation and economic globalisation

The primary objective of this paper is to examine the impact of innovation and economic globalization on economic growth and the transition from the middle-income trap. The study analyses the impact of innovation and economic globalization on economic growth using the Bayesian model averaging (BMA)...

Full description

Saved in:
Bibliographic Details
Published in:Applied economics 2024, Vol.56 (1), p.1-21
Main Authors: CM, Jayadevan, Hoang, Nam Trung, Yarram, Subba Reddy
Format: Article
Language:English
Subjects:
Bayesian analysis
Cox
Economic analysis
Economic growth
Economic theory
Exports
Foreign investment
Generalized method of moments
globalisation
Globalization
GMM
Growth
Health insurance
innovation
Innovations
Labor productivity
Life insurance
Medical technology
Openness
Premiums
transition
Urbanization
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The primary objective of this paper is to examine the impact of innovation and economic globalization on economic growth and the transition from the middle-income trap. The study analyses the impact of innovation and economic globalization on economic growth using the Bayesian model averaging (BMA) and the generalized method of moments (GMM). For the first time, this paper employs Cox regressions to estimate the transition speed from the middle-income trap. With the help of the extended Cox regression analysis, the study shows that mean years of education, life-insurance and non-life insurance premiums significantly increased the transition speed to high-income and thus reduced the transition duration. The important innovation variables like labour productivity, internet usage and scientific journal articles count also increased the transition speed and reduced the transition duration. The time-dependent covariates of trade openness, foreign direct investment, high-technology exports, health spending, urbanization, and life insurance premiums also increased the transition speed and thus reduced the transition duration. The research indicates that breaking free from the middle-income trap may not require a surge in patent numbers. The present paper provides some directions to achieve better economic growth and escape the middle-income trap.
ISSN:0003-6846
1466-4283
DOI:10.1080/00036846.2023.2267821