Government Policies Impact on the Innovation Growth in Developing Countries

Document Type : Research Paper

Authors

1 E

2 e

3 p

Abstract

Innovation diffusion is one of the most significant determinants affecting competitiveness, development and economic growth. Thus, investigating factors that affect this variable is important to stimulate the development process. One of the most prominent factors which affect innovation is the government’s policies. In this article, we attempt to look into the importance of governments' demand-side policies in developing countries on innovation growth over the period 2011-2015. Therefore, monetary, fiscal, commercial and currency policy effects on innovation growth are investigated. The outcomes of the GMM model show that the increase in interest rate, government spending, and tariff rate have a positive and statistically significant effect on innovation, while the impact of the under-valued exchange rate is negative and statistically significant. Hence, demand-side policies should be coordinated with supply-side policies to boost demand for domestic innovation.
 

Keywords

References

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new economy and trad
Volume 14, Issue 3
May 2020
Pages 19-40

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  • Receive Date: 04 June 2019
  • Revise Date: 07 July 2019
  • Accept Date: 18 September 2019

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