Furthermore, university enrolment rate, government expenditure on R&D, high-tech market, patent and scientific journal published are statistically significant in the fixed effect model. The coefficients of these variables as a measure of national innovation system are positive and statistically significant at the 1% and 5% levels of significance which implies that national innovation system as a whole has a positive effect on economic growth in BRICS economies and in consequence spurs their economic growth. With regards the relative effect which is explained by the dynamic panel model, the coefficients of university enrolment rate, government expenditure on R&D, high-tech market and scientific personnel are also positive and statistically significant
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This finding is in conformity with theories and in line with findings by Hulya Ulku, (2007) and Yanrui Wu, (2012) that there is positive relationship between R&D expenditure and economic growth and increase in R&D expenditure will eventually induce economic growth.
The coefficient of high-tech market (TM) is positive and statistically significant at the 1% level of significance for both the fixed effect and dynamic panel model estimates. From the relative effect by the dynamic panel model, enhancing high-tech market development by 1.0% will promote economic growth by approximately 3.6%.
Unlike the panel dynamic model, the coefficient of the variable representing patent application is positive and statistically significant at the 1% level of significance in the fixed effect model. This implies that an increase in patent application by 1.0% will induce economic growth by approximately …show more content…
Consistent and reliable panel dataset spanning from 2004 to 2013 for the selected emerging economies were sourced from the International Financial Statistics and the World Bank data base. A panel estimation approach was employed using Hausman specification test in choosing between the fixed effect and random effect model in our estimation. From the results of the Hausman specification test the individual unobserved country-specific effects were found to be uncorrelated with the explanatory variables, which suggested the preference of the fixed effect over the random effect model. The Sargan test result for over identification restriction also shows validity in the instruments employed in correcting potential endogeneity in the dataset used in estimating the dynamic panel model. Findings from this study reveal that developing a national system of innovation in BRICS economies is exceptionally crucial in advancing a constructive approach for promoting sustainable growth in emerging economies. Results from this study as a whole reveal that increasing the role played by universities, government and businesses will eventually lead to an increase in economic growth. An important policy implication emerging from this study is that, extra
This finding is in conformity with theories and in line with findings by Hulya Ulku, (2007) and Yanrui Wu, (2012) that there is positive relationship between R&D expenditure and economic growth and increase in R&D expenditure will eventually induce economic growth.
The coefficient of high-tech market (TM) is positive and statistically significant at the 1% level of significance for both the fixed effect and dynamic panel model estimates. From the relative effect by the dynamic panel model, enhancing high-tech market development by 1.0% will promote economic growth by approximately 3.6%.
Unlike the panel dynamic model, the coefficient of the variable representing patent application is positive and statistically significant at the 1% level of significance in the fixed effect model. This implies that an increase in patent application by 1.0% will induce economic growth by approximately …show more content…
Consistent and reliable panel dataset spanning from 2004 to 2013 for the selected emerging economies were sourced from the International Financial Statistics and the World Bank data base. A panel estimation approach was employed using Hausman specification test in choosing between the fixed effect and random effect model in our estimation. From the results of the Hausman specification test the individual unobserved country-specific effects were found to be uncorrelated with the explanatory variables, which suggested the preference of the fixed effect over the random effect model. The Sargan test result for over identification restriction also shows validity in the instruments employed in correcting potential endogeneity in the dataset used in estimating the dynamic panel model. Findings from this study reveal that developing a national system of innovation in BRICS economies is exceptionally crucial in advancing a constructive approach for promoting sustainable growth in emerging economies. Results from this study as a whole reveal that increasing the role played by universities, government and businesses will eventually lead to an increase in economic growth. An important policy implication emerging from this study is that, extra