Catching-up Countries Research Articles

Evolution of the regional innovation system in terms of the Covid-19 pandemic, financial and economic crisis: The long term perspective from Central European region

Research background: The evolution of the innovation system is not easy to explore due to the small number or selective nature of the international research about it. The natural trajectory is well known in a long time period but differs between regions and countries — more or less developed. If the impact of the external shocks on regional innovation system (RIS) is added here, the situation is even more complicated. The answer for the crises depends on the development level of a country and region, the maturity of the relationships between actors of the Triple Helix (entrepreneurship, science, government) — their strength and stability over time, some endogenous conditions specific to it. The knowledge about the evolution of the innovation system is crucial to understand how the system works, where it was, is and will be at the evolution trajectory. Purpose of the article: Therefore, the purpose of this paper is to identify the evolution of the RIS in the one of Central Europe’s regions (Lower Silesian in Poland) including the impact of the global financial crisis and the Covid-19 pandemic on the innovation technology there. Methods: Using microdata collected by the authors and the stepwise logit modelling, industrial enterprises were analysed in three time periods: 2004–2006, 2010–2012 and 2019–2021. Total 1649 questionnaires forms were collected. The research was made in the one of Poland's well advanced regional innovation systems — the Lower Silesian. The matrix of success and fail was used as long as the AUC curve and some statistical indicators to prove the usefulness of models. The dependent variables were the new technology pushed by R&D and the investment in new machinery and equipment. Findings & value added: The nature of RIS evolution in the one of the regions in Central Europe in a catching-up country in the context of financial crises and Covid-19 was examined. The analyses identified two alternative groups of conditions — high or low resilience to various market shocks. To the first group belongs: R&D and equipment interactions (the growing competence effect) and a cooperation along the supply chain in the industry. The low resilience is observed in the other categories, as follows: the cooperation with science institutes and business support organizations (the isolation effect), the lack of external sources of funding (the sinking effect), the short time reaction of entrepreneurs (the adaptation effect). As was pointed above in the catching-up country, some elements of the Triple Helix are more sensitive to external shocks, while others are not. The crisis situation can radically slow down an evolutionary development or change its direction. Knowing them will allow the local authority to react on time or with a low delay to reduce negative consequences of it to the regional economy. Authors have shown a new approach to the evolution process of regional innovation system. It could be useful to learn how, where and when the system is going to.

Small countries facing the technological revolution: fostering synergies between economic complexity and foresight research

Purpose Although the significance of technological progress in economic development is well-established in theory and policy, it has remained challenging to agree upon shared priorities for strategies and policies. This paper aims to develop a model of how policymakers can develop effective and easy to communicate strategies for science, technology and economic development. Design/methodology/approach By integrating insights from economic complexity, competitiveness and foresight literature, a replicable research framework for analysing the opportunities and challenges of technological revolutions for small catching-up countries is developed. The authors highlight key lessons from piloting this framework for informing the strategy and policies for bioeconomy in Estonia towards 2030–2050. Findings The integration of economic complexity research with traditional foresight methods establishes a solid analytical basis for a data-driven analysis of the opportunities for industrial upgrading. The increase in the importance of regional alliances in the global economy calls for further advancement of the analytical toolbox. Integration of complexity, global value chains and export potential assessment approaches offers valuable direction for further research, as it enables discussion of the opportunities of moving towards more knowledge-intensive economic activities along with the opportunities for winning international market share. Originality/value The research merges insights from the economic complexity, competitiveness and foresight literature in a novel way and illustrates the applicability and priority-setting in a real-life setting.

Resilience to economic shrinking: reinterpreting the Asian economic miracle in a comparative perspective, 1964–2018

ABSTRACT The successful economic performance of Pacific Asia is often held as a source of inspiration for aspiring catching-up countries. Notwithstanding, recent literature suggests that a key to the understanding of successful long-term economic performance lies not only in the ability to generate economic growth, but in limiting incidences of economic shrinking. Such analyses to explain the Asian economic miracle are however in short supply. This study highlights the significance of economic shrinking in Asia in a comparative perspective to demonstrate how and why resilience to economic shrinking was a significant aspect of the successful development of the region. To approach the question of why some countries became more resilient than others we propose a social capability framework and apply it to a sample of 26 developing countries between 1964 and 2018. We construct a social capability index on which we develop a set of simple OLS regressions to estimate the impact of social capabilities on shrinking patterns. We demonstrate that poorly endowed countries do not lack the ability to generate growth, but their limited resilience prevents them from catching up.

INDUSTRIAL POLICY IN ASIAN NEWLY INDUSTRIALIZED COUNTRIES: CONTROVERSIES, REVIEW AND LESSONS

The paper’s aim is to use the successful example of the newly industrialized Asian countries, as well as the countries of the East Asian region in general, to prove the need to implement industrial policy in many countries, both those lagging behind in industrial development and those that have reached the technological frontier. The paper describes the evolution of industrial policy in these countries and what distinguishes them from other developing countries that were unsuccessful in its implementation: the developmental state, which recognized timely the turning point from the strategy of import substitution to the strategy of export promotion, implemented both strategies simultaneously, picked winners, provided support to infant industries through selective interventions, but also disciplined the recipients of its support, tracked its own comparative advantages and anticipated their changes, with a strong synergy between the state and private sectors, and looking at Japan as a model of industrial development, i.e. the lead goose. Industrial policy is one of the most controversial issues in economics. There has been a long debate between two schools of thought - orthodoxy and heterodoxy - as to whether there is a need for industrial policy in general, as well as the role of the state in the process of its creation and implementation, as opposed to the free market model of development in which there is no place for industrial policy, and if it appears it can be only of a general nature, and by no means in the form of selective interventions. Over the last 10 to 15 years, there has been a revision both at the academic level and in the real world that has made industrial policy more acceptable, and thus the debate about it has become less ideologically colored and more pragmatic and nuanced. At the theoretical level, the market fundamentalist view of little theoretical justification for industrial policy has lost its dominance. Despite maintaining neoliberal orthodoxy as the advice of international financial institutions in the process of creating economic policy in developing countries, industrial policy remained important for the promotion of industrial development, especially the infant industries. It is accepted that there are many types of market failures that must be addressed through industrial policy. It is increasingly recognized that industrial policy is not just a highly idiosyncratic practice associated only with the miracle economies of East Asia, but what most of today’s developed countries used when they were in the position of the catching-up countries. As a conclusion, the paper discusses the possibility of transferring the East Asian model to other countries, and sheds light on the determinants of industrial policy success and failure. The key conclusion is that there is room for successful industrial policy even in countries that have reached the technological frontier and want to push it further, as well as in countries lagging behind in industrial development, although the global context in which industrial policy is situated has changed over time. A special commentary is referred to the economic and industrial development of the former countries of Yugoslavia.

Концептуальные основы евразийского дискурса

It is shown that the original message of the founders of the Eurasian doctrine corresponded to the paradigmatic foundations of non-classical science, but does not correspond to the modern paradigm of socio-humanitarian knowledge. The authors of the Eurasian concept, whose scientific thinking was formed in the context of the formation of non-classical approaches in social and humanitarian knowledge, developed the idea of cultural and historical types by N. Y. Danilevsky. But some of the categories they based their theory on had their origins in the classical paradigm, the methodological limitations of which were already obvious at that time. If the category of the West is still used in science, then the concept of the East has turned out to be debatable and therefore always requires explanation. The state of social knowledge at that time (the 20s – 30s of the twentieth century) required a revision of the classical ideas about Russia's place in the geopolitical process as a catching-up country, but it turned out to be unable to answer the main questions that the political elite asks at the turn of each century. The inadequacy of the categorical apparatus did not allow us to build a viable social theory.

Do innovations and external collaboration influence public procurement contracts’ success? evidence from catching-up Visegrád Group economies

In recent times, the attention given to innovations and informal competitions and their ability to stimulate demand-side policies such as public procurement contracts have mounted among policymakers and researchers. However, fewer studies have focused on analysing these relationships, especially in catching-up countries. This paper, therefore, aims to investigate whether innovations and, its related activities, and informal competitions play important roles in influencing firms’ decisions to secure public procurement contracts. We employed the logistic and treatment effect regression models using pooled cross-sectional data from the 2019 World Bank Enterprise Survey to test these relationships. The results, based on a cross-sectional sample of 2,606 firms, revealed that product innovation and informal competitions positively influence firms’ abilities or willingness to secure public procurement contracts. On the contrary, we find that process innovation does not influence firms’ ability to obtain public procurement contracts. The results also demonstrate that patents and external collaboration significantly influence firms’ abilities to successfully secure public procurement contracts. The main practical implication of the research is that firm managers in catching-up economies such as the Visegrád Group aiming to be successful in the tendering process should consider engaging in innovation and collaborative bidding to stand a better chance of securing these competitive government contracts.

Joint foreign ownership and global value chains effects on productivity: a comparison of firms from Poland and Germany

PurposeThe study aims to examine the joint effects of foreign ownership (FO) and involvement in global value chains (GVCs) on the productivity performance of firms from a catching-up country (Poland) and a leader economy (Germany).Design/methodology/approachThe authors use micro-level data on firms combined with several sector-level GVC participation measures. The authors investigate whether the link between productivity and the overall sectoral degree of involvement in global production structures depends on a firm's ownership. The authors verify the robustness of the obtained results by using an instrumental variables approach and weighted regression.FindingsThe results show that domestically owned firms are less productive than foreign ones, which is particularly true at low GVC participation levels. However, as GVC involvement increases, the FO productivity premium decreases, leading to productivity catching up between foreign and domestically owned firms. This mechanism is similar in Poland and Germany. However, in the leader country (Germany), the productivity performance of domestically owned firms is more stable along the distribution of GVC involvement.Originality/valueThis study contributes to the foreign direct investment (FDI)–productivity literature by comparing the catching-up and developed countries' perspectives and incorporating the productivity–GVC relationship into the FDI analysis. The authors show that the FO premium is not confined to the developing context but is also present in a leader country. Moreover, the link between productivity and the overall sectoral degree of involvement in global production structures depends on a firm's ownership.

Оценка уровня цифровизации и устойчивого развития в странах европейского региона

The world economic development nowadays is characterised by the significance of digital innovations and sustainable development in all areas of production and management. However, the existing literature still cannot explain how environmental, economic and social factors of sustainable development corresponding to these innovations affect the new global ecosystem, based on the introduction and adaptation of digital technologies and achievement of the United Nations Sustainable Development Goals (SDGs) at the national level. The article presents the results of the authors’ assessment and classification of countries according to the achievement of the SDGs and implementation of digital innovations in the national and global economy. The empirical analysis utilises the data on the digitalisation performance indicators of the Global Innovation Index (GII) and the Sustainable Development Goals Index (SDG Index). The country assessment matrix was classified in terms of digitalisation and sustainable development and tested on a sample of European countries. Cluster analysis of 39 European countries identified four homogeneous clusters, which have distinctive systemic characteristics: advanced countries, catching-up countries, locomotive countries and leaders in sustainable and digital development. The identified clusters ex-pand the possibilities for substantiating socio-economic and technological strategies at the country – region – industry level. Russia is revealed as one of the eleven catching-up countries. The paper specifies the directions of the strategy to achieve the target digitalisation and sustainable development in the process of integration of the SDGs into national indicators. The proposed assessment can be used to adjust the state policy for the co-development of digital innovations and sustainable development indicators.

Investigating the structure and evolution of the innovation network of catching-up countries in the field of solar energy using patent citations analysis

در طول سه دهه گذشته، پژوهش‌ها بر این موضوع متمرکز بوده‌است که کشورهای متأخر چگونه و تحت چه شرایطی توانسته‌اند به تولیدکنندگان اصلی فناوری‌های جدید همچون انرژی‌های تجدیدپذیر تبدیل شوند و در این حوزه فرارسی فناورانه نمایند. این موضوع برای کشورهای در حال توسعه از آن جهت مورد تاکید است که از سویی بیشترین رشد تقاضای انرژی در سال‌های آینده در این کشورها خواهد بود و از سوی دیگر پنجره فرصت سبزی است تا سایر کشورهای در حال‌توسعه بتوانند با در نظر گرفتن آن به درس‌آموزی و یادگیری پرداخته و در جهت فرارسی در این حوزه‌ها تلاش نمایند. در این پژوهش سعی شده‌است تا فرارسی فناورانه از طریق تحلیل ساختار و تکامل شبکه نوآوری حوزه انرژی خورشیدی با استفاده از تحلیل استنادات پتنت بررسی شود. بدین منظور پتنت‌های این حوزه از پایگاه نوآوری دِرونت و در بازه زمانی سال 1980 تا 2017 استخراج و پاکسازی شد. سپس شبکه استنادات تشکیل و با استفاده از روش‌های تجزیه و تحلیل شبکه‌های اجتماعی ساختار کلی شبکه و ویژگی‌های سطح کشور بررسی شد. نتایج نشان داد که کشورهایی که از طرفی به مرور ظرفیت جذب خود را از طریق پیوستن به شبکه جهانی نوآوری و حرکت در خط سیر فناوری‌های کشورهای پیشرو از طریق افزایش استنادات به پتنت‌های این کشورها، افزایش دادند و از طرفی دیگر پتنت‌های باکیفیتی در حوزه‌های جدید ثبت کرده‌اند، مورد استناد روزافزون سایر کشورها قرار گرفته‌ و موفق شدند در شبکه جایگاه ویژه‌ای به عنوان واسط و میانجی انتقال و اشاعه فناوری پیدا کنند و موفق به فرارسی فناورانه شوند.

Assessment of the Impact of Scientific and Technical Activities on the Economic Growth of World Countries

At present, scientific and technical activities (STA) play a fundamental role in the creation of new knowledge necessary for the realisation of the goals of sustainable economic growth. The purpose of the research is to assess STA in countries of the world and Ukraine as well as to analyse the impact of STA on their sustainable economic growth. For the assessment of STA of world countries, we have developed a composite indicator (Index of STA–ISTA) based on two sub-indices (Potential of STA and Results of STA) and a set of partial indicators. The study is carried out using a theoretical and methodological approach that includes five research stages: calculating the ISTA of world countries with their subsequent ranking; assessing the impact of the ISTA on the economic growth of world countries; evaluating the correlations between the ISTA, the Global Innovation Index (GII), and the Human Development Index (HDI); breaking down world countries into groups with the help of cluster analysis, using data on the ISTA, GII, HDI; assessing and analysing the importance of environment-related technologies and innovations in ensuring the economic growth of countries of the world. According to the results of the study, the importance of STA in ensuring sustainable economic growth of countries of the world was confirmed. The use of cluster analysis to group countries of the world in terms of the level of STA made it possible to identify three clusters of countries: leaders, potential leaders, and catching-up countries. It has been proven that in order for a country to achieve leadership in terms of STA, it is important to harmoniously combine efforts to support and develop its scientific potential as well as to create principles for the implementation of scientific achievements in innovation activities to ensure its economic growth and improve the living standards of its population. Besides, the analysis allowed proving the existence of a moderately positive impact of the development of environment-related technologies and innovations on the acceleration of innovative development, improvement of the quality of life of the population, and the growth of GDP per capita.

Approaches to Ensuring Russia’s Technological Self-Sufficiency

Ensuring technological self-sufficiency has become a systemic task of the State. Weunderstand technological self-sufficiency as the ability of the state to ensure scientific, technologicaland industrial development for creating and maintaining on its territory its own technologiesand infrastructure sufficient to guarantee independence from foreign technologiesin critical, vital areas.In this article, we propose conceptual approaches for formation of technological self-sufficiencyin Russia and assess potential and conditions of its development. The theoretical basis ofour concept is linked to the idea of technological leapfrogging. The notion of a technologicalleap implies that the catching-up country is able to follow the leaders at an accelerated pace,and even to find its own trajectory of technological development.The conceptual framework for technological self-sufficiency based on technological leapfroggingincludes the choice of thematic priorities and the organization of cooperative projects,preferably based on competition, to minimize the risks of technological failures. Since thepolicy of technological leapfrogging is expensive, budget funding plays an important role inthe first 5-7 years. It can be provided through both special programs and institutes for development.The assessment of the current situation in Russia shows that the technological leapfroggingis possible based on consortiums with the participation of medium-sized fast-growing companies,and in the field of production tools – based on individual groups able to develop andproduce domestic scientific equipment. However, the reorientation of scientific potential will take some time, especially when there isa high risk of an outflow of the most qualified personnel from the country. It is also importantto implement measures aimed at strengthening cooperative linkages, which are still underdeveloped.

Conditions Driving Eco-Innovation in a Catching-Up Country—ICT vs. Industry in Poland

There is a necessity to combine the development of the European Union with a model of a sustainable economy, which is important to stimulate eco-innovation. The government of each member state is obliged to create support mechanisms that will encourage entrepreneurs to implement pro-environmental solutions. This requires the identification of determinants for eco-innovation. This paper identifies and compares conditions of eco-innovation in two sectors in Poland: ICT (information and communication technologies) and industry. Putting together many different types of conditions into one model (including government, science, industry, and ICT) allows us to explain what is more important when making a decision about implementing new eco-solutions. The study covered over 3000 enterprises. Stepwise logit regression was used to examine all relationships of interest. We discovered two separate (independent) paths of approach to eco-innovation for ICT and industry. This means that another condition should be fulfilled to reach any eco-innovation in each of the sectors. There are just a few factors supporting new environmental solutions in ICT with strong impact—cooperation with suppliers, journals as a source of new knowledge, or financial support by credit institutions with high materials and energy efficiency at the end of the process. Industry could be described more like a horizontal approach—a wide number of conditions with low impact on eco-innovation. Therefore, innovation policies in the catching-up country should be more sophisticated and take care of more relevant tools for both sectors.

The National Innovation System in a catching-up country: empirical evidence based on micro data of a Triple Helix in Poland

Research background: There are two main directions for the research of the national innovation system (NIS): the international comparison of macro data from national statistic offices or specific micro research restricted mostly to analysing selected issues. There is a lack of empirical studies regarding the national innovation system as a whole based on micro raw data and using statistical models. Purpose of the article: To identify and evaluate the impact of the triple helix (an input and output approach) on the NIS in Poland, including internal interactions between industry, science and government. Methods: A questionnaire surveys were conducted by the authors over the past five years in 6,284 manufacturing enterprises. The multifactor stepwise logistics regression forward was used to evaluate what, where and how effectively the NIS institutions in catching-up and medium-sized countries such as Poland are working. Findings & value added: The NIS of Poland is a complicated and non-mature system. Some parts of the network are effective, while others are not. It is noted that cooperation between enterprises stimulates innovation to a greater extent than cooperation with scientific institutions and public administration. The vertical supply chain is the main driver of NIS in Poland. Domestic scientific institutions have an impact that is often short-term, fragmented, and non-continuous, though it can be strong from time to time. Strangely, organizations with low knowledge potential support industry innovation activity more efficiently and in a more organised way than science institutes, excluding foreign ones. For catching-up countries, this is an important bridging of the knowledge gap - it turns out that the quantity and quality of domestic knowledge in the national innovation system is inefficient. Scientific institutions need to achieve sufficient critical mass to stimulate innovative activity. The value of the conclusions is underlined by the fact that the analyses were based on micro data, which allowed to capture the relationships between the different elements of the triple helix.

Global competitiveness analysis of industrial robot technology innovations market layout using visibility graph

The competition degree and characteristics of the target markets based on a global vision provide references for market entrants and policymakers. This study describes a method for identifying the global technology innovations market layout competitiveness based on time series data analysis. We map the time series data from 30 countries or areas of the global industrial robot technology innovations market through retrieval strategy and data mining onto complex networks by visibility graph algorithm. We analyze the dynamic characteristics by the VGNs’ topological measures after the development trend overview and stage division analyses. We use cosine similarity to evaluate the differences and similarities between countries or areas. To further uncover the relationships among them, a similarity complex network is constructed by setting a link threshold. Seven community categories as sub-markets are found through community division. CN and US rank as the top two largest industrial robot innovation markets. Most European countries share the same community because of their similarity of economic development brought by geographical proximity except for several earlier developed economies such as DE, GB, FR, and IT. Some catching-up countries, for example, IN and PH, show potential similar dynamic trends respectively in their group for the sharing characteristics probably with the similar economic development type as the reason behind, whereas RU is distinct for its unique economy type.

The Hybrid Metro: The Brown Line of the Taipei Metro and Technological Hybridity

The Taipei City Government launched project of automated guideway transit system in the 1980s caused a conflict with the central government's metro project. This conflict drew the intervention of the US government, who invited American transportation consultants to integrate the two transit systems into one. The Brown Line became the only automated metro line of the Taipei Metro. Although the US government had hoped an American company would be the system provider for the Brown Line, Matra’s VAL256 won the contract. However, the VAL256 experienced fire and tire explosion accidents, leading to conflicts between Matra and the Taipei City Government. Matra withdrew all its technical supports to pressure Taipei to pay the down payment. Nonetheless, Taiwanese technical officials and engineers modified the system with flexible strategies making the Brown Line work smoothly without Matra’s technical support. Later, The Taiwanese technical officials invited Bombardier to provide its CITYFLO system and integrated it with the modified VAL256 into one system, avoiding paying a high price to Matra for the extension of the Brown Line. How the Brown Line became a hybrid metro system shows how technological hybridity can change the power relationship between technologically advanced countries such as France and “catching-up countries” such as Taiwan.

The paradox of open innovation in Slovenian firms

Innovation and open innovation are expected to strengthen firm performance. The learning process and inbound activities are particularly important for catch-up countries and firms. The empirical evidence, though, is incomplete and provides inconclusive results. This paper studies the role of open innovation activities in a sample of Slovenian firms. Using a combination of survey data and official registry financial statements data, we investigate the differences in the role of open innovation across firms with different productivity. The results show that open innovation is more important in less productive firms. This is consistent with the theoretical ideas that stress the role of learning, capacity building and knowledge transfer. However, these firms also invest less in open innovation activities, which is a paradox in itself, introducing an important challenge for managers as well as questions for future research.

Economic Development of the Latin American Integration Association: Trends and Prospects

Relevance. Catch-up countries are at a disadvantage in the world economy and are forced to fight for world market share. For this purpose, they form political and economic alliances and associations designed to counter the aggressive policies of the developed countries. All this applies fully to countries that are members of the Latin American Integration Association (LAIA). In our opinion, the assessment of the position of the participating countries on the geopolitical map of the world deserves special attention.Purpose of the study consists in the formation of an author’s methodology for studying the economic development of countries that are members of the Latin American Integration Association and building a forecast in the medium term on the basis of statistical tools. Materials and methods. The study used general research methods, such as analysis, comparisons, historical, as well as mathematical and statistical, in particular tabular and graphical, descriptive statistics and elements of correlation-regression analysis. A set of these methods and algorithms made it possible to identify the patterns that have developed at the moment in the economies of the Latin American Integration Association countries, assess their positions regarding world leaders, and also build short-term development forecasts.Results. With considerable resources, the countries of the Latin American Integration Association have not been able to significantly increase the share of world GDP during the existence of the association, which throughout the period does not exceed 5%. Within the association, there is a considerable differentiation. So the dominant positions are occupied by Brazil, Mexico, Argentina, while the positions of outsiders, by a significant margin, are occupied by Uruguay, Ecuador and Cuba. The structure of the economies of the association countries is largely different from the developed countries: the former are dominated by manufacturing, while the latter are dominated by services. A causal analysis of the impact of industries on GDP per capita, conducted in two time slices in 1990 and 2019, showed that during this time the countries that are members of the association have not been able to reformat the structure of their economies, which does not allow successful competition with developed countries. An element of the scientific novelty of the study is the formation of a theoretical and methodological approach to the study of the economic development of the geopolitical structure, which is the Latin American Integration Association, as well as the testing of this approach based on the actual data of international organizations.Conclusion. The testing of the author’s methodology aimed at studying the economic development of LAIA member countries allows us to argue about the operability of the algorithm, which made it possible to establish the low efficiency of the integration policy of Latin American countries, which, despite the significant level of national wealth, does not allow us to form a trend towards economic growth, a decrease in dependence on the export of natural capital, and an increase in the standard of living of the population. Some research findings from the study can be used in training activities for the disciplines of “Macroeconomics”, “International Statistics”, “Geoeconomics”, “Econometrics”, as well as in the analysis of the joint dynamics of political and economic communities, associations and groups. In subsequent publications, an in-depth analysis of the causes of the economic decline in each member country of the association will be carried out, dominant factors affecting growth and GDP decline will be identified.

Identification of the Technology Frontier

The subject of this study is the innovation market. To understand the laws of its functioning, this article introduces the concept of a technology frontier. This is understood as the relative productivity of labor (relative to the technological leader – the United States), the achievement of which makes it justified for developing economies to move from large-scale borrowing of foreign new technologies to their development within the country. The purpose of the article is to determine the specified frontier, for which a simple econometric model based on international statistics for 61 countries is proposed. To improve the accuracy of the calculations, countries were clustered into two groups: advanced, for which the technology frontier has been crossed and their own developments of new technologies prevail, and developing, for which the problem of the technology frontier remains important. The current value of the technology frontier is in the region of 70% of labor productivity in the United States. The comparison with previous estimates shows that this value tends to increase, which creates additional difficulties for the transition of catching-up countries from the mode of borrowing to the mode of creating new technologies. Taking into account the technological frontier allows avoiding both an undue delay in the development of proprietary technologies as well as a premature transition to the creation of innovations while ignoring the possibilities of borrowing.

The nexus between bank connectedness and investors’ sentiment

This paper explores European bank connectedness built on the idiosyncratic returns and proposes an alternative systemic risk measure based on sentiments. The results show that banks in developed European countries form a large network, alongside the U.S. banks, while banks in European catch-up countries are gathered in their own clusters. The spillovers received by the European banks from the U.S. are higher compared to those received by the U.S. banks from the European banks. The network connectedness is sensitive to the nature of each crisis. The TRMI financial sentiment index proves to be a suitable proxy for the systemic risk.

SME modes of innovation in European catching-up countries: The impact of STI and DUI drivers on technological innovation

At the intersection of SME innovation and innovation systems, this study investigates the characteristics of SME innovation modes in catching-up European countries (Southern, and Central and Eastern European) and compare it with selected among the most advanced countries in Europe as a mean to show key differences. Distinguishing between STI (Science, Technology and Innovation) and DUI (learning-by-Doing, Using and Interacting) innovation drivers, and analyzing their impact on technological innovation we study 29,834 SMEs innovation in 15 countries. We argue that the most effective SME innovation modes in catching-up countries are peculiar vis-à-vis other types of countries (e.g. advanced economies). Results show how their economic, institutional and innovation context influence SME forms of knowledge and learning. In general, catching-up countries show effective DUI-type collaborations for process innovations, while showing more limited returns than advanced countries from the STI mode of innovation.