TITLE:
Innovative Infrastructure, Financial Development and Innovative Activity in Developing Economies: Cross Country Empirical Investigation
AUTHORS:
Raufhon Salahodjaev, Evgenia Gorlova, Adilova Shoira
KEYWORDS:
Innovation; High-Tech Export; Clusterization; Infrastructure; Cross Country; Developing; Banking Sector
JOURNAL NAME:
Modern Economy,
Vol.4 No.4,
April
26,
2013
ABSTRACT: Over the last decades, technological advances
have been the most important determinant of growth rate for many countries. Recent
studies have been focused on explaining growth rates of countries through endogenous
technological change. However there is limited number of papers aimed to explain
innovative activity in developing countries. The purpose of the paper is to test
the impact of banking sector and innovative infrastructure (patent protection and
industrial clusterization) on innovative activity of developing economies. This
paper provides empirical evidence on effects of banking system development and innovation
infrastructure on innovative activity based on the sample of 51 developing economies.
For example, an improvement in innovative cluster development and increase domestic
credit to private sector of Russia from existing level (catching up countries) to
the level of Brazil (foregoing ahead), is associated with 4.8 percent increase in
high tech exports, ceteris paribus. Most of the variables in our paper
are public policy variables (quality of banking system, sophistication of innovative
infrastructure). Our empirical discoveries ought to be of high interest to policy
makers in developing economies intended to achieve sustained economic growth through
technical and technological advance.