The impact of knowledge diffusion on economic growth across countries

Abstract

The aim of this paper is to examine theoretically and empirically the impact of improvement in the capability to access innovation and knowledge on economic growth and convergence among countries. Our results, obtained using an augmented Solow-Swan growth model and panel data methodology with a sample of 138 countries for the period 1990–2014, show not only that improvement in the capability to access innovation and knowledge (proxied by percentage of internet users) has a positive impact on said economic growth, fostering the technological catch-up process for developing countries and accelerating the pattern of economic convergence, but also that this improvement has an even greater effect on developing countries when democracy is well developed, accelerating the pattern of economic convergence even further.