Abstract
The aim of this paper is to examine the empirical relationship between the knowledge-based economy and economic growth in MENA countries. We are interested in identifying pillars linked with the transition to a knowledge-based economy that is related to growth performance. We used a growth model in Barro and Sala-i-Martin framework (1995) for the period of 2010–2015. It includes a panel data set that consisted the annual economic growth rate for selected MENA countries and, within the theoretical and empirical framework, applied the four indicators used for identifying the situation of the knowledge-based economy. The empirical results obtained using the generalized method of moments dynamic panel indicates institutions, human capital and research, infrastructure, and business sophistication to be the pillars of knowledge-based economy that influence a significant and positive economic growth in MENA countries. We suggest that governments in this region should consider the knowledge-related policies for accelerating transiting to the knowledge-based economy and improving economic performance.
Highlights
Nowadays, the world’s economies are rapidly transiting towards being more knowledge-based, and supporting knowledge is a vital factor of economic growth
A study of economic growth in this region which focuses on the knowledge-based economy literature can help policy makers. In this context, the aim of this paper is to investigate empirical policies and investments linked to the transition to a knowledge-based economy such as the institutional framework, human capital and research, public and private infrastructure, and business sophistication are which related to higher economic growth rates and economic welfare in Middle East and North Africa (MENA) countries
We report the results under two assumptions: first, the impact of the three control variables including INV, government consumption (GOV), and OPEN, without considering the knowledge-based economy (KBE) indicators; second, the impact of the three control variables, considering the KBE indicators individually
Summary
The world’s economies are rapidly transiting towards being more knowledge-based, and supporting knowledge is a vital factor of economic growth. Knowledge-based economies provide an environment where competition is vital. Chen and Dahlman (2005) reported that a knowledge-based economy is built upon four pillars: First, it requires an economic and institutional framework that provides incentives for the efficient creation, the dissemination, and the use of knowledge to promote growth and increase welfare. It needs an educated and skilled population that can create knowledge and use it. A dynamic information infrastructure is required that can facilitate effective communication and processing of information
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