Research Expenditures Research Articles

Exploring the direct impact of environmental, social and governance (ESG) factors on organisational innovation output and institutional isomorphism: a study in the context of multinational life sciences organisations

PurposeThe purpose of this study was to investigate potential direct impact of environmental, social and governance factors (ESG) on organisational innovation and their role as isomorphic factors in multinational life sciences organisations.Design/methodology/approachThe authors applied necessary condition analysis (NCA), using the R statistical tool to determine the direct impact of environmental (E), social (S), governance(G) and composite ESG factors on innovation, represented by research and development (R&D) expenditure across a sample of 86 multinational life sciences companies.FindingsThe study established that ESG factors have a positive impact on the innovation output of multinational firms in the life sciences industry. Further, the study also established that ESG factors act as isomorphic factors in the organisation of multinational life sciences firms in implementing sustainability practices.Originality/valueThis empirical research study was a novel attempt to establish a direct impact of ESG factors on innovation output of multinational life sciences firms. This was one of the first empirical studies to integrate the institutional theory with the resource-based view and thereby demonstrate that ESG factors had a significant role in contributing to institutional isomorphic behaviour, in the form of sustainable innovation as a strategy. This study established the importance of ESG factors in defining the sustainability agenda of multinational life sciences organisations. Lastly, the study elucidates the benefits of the integration of sustainability as a strategy in multinational life sciences corporations.

Innovation and Intellectual Property Rights: A Case Study of Zambia

The paper explores the intricate relationship between innovation and intellectual property rights (IPRs) within Zambia's diverse economic sectors. It investigates the impact of patent filings, research and development (R&D) expenditure, the number of science graduates, government funding, and international collaborations on fostering innovation across Zambia's ten provinces. The study highlights Zambia's efforts to enhance its innovation ecosystem through government policies, stakeholder contributions, and international partnerships. Despite significant strides, challenges such as limited R&D funding, inadequate infrastructure, and weak enforcement of IPRs persist. The research findings reveal that increased R&D expenditure and a higher number of science graduates significantly boost patent filings, underscoring the critical role of investment in research and education. However, the effectiveness of government funding in driving innovation remains uncertain. The paper concludes with recommendations for strengthening Zambia's innovation framework, emphasizing the need for robust IPR enforcement, enhanced public awareness, and continued support for higher education and international collaboration. This study provides valuable insights into the role of IPRs in promoting innovation in developing countries, with broader implications for similar economies.

The Effect of Governance on the Relationship Between Research and Development Expenditure and Economic Growth in South Africa

This study analyzes the effects of governance on the relationship between research and development expenditure and economic growth in South Africa using annual data from 1997 to 2022 using an autoregressive distributed lag (ARDL) model. The calculated F-tests for the two models in the ARDL bounds testing approach to cointegration revealed a long-run relationship between the series. In the model without a mediating factor, an insignificant impact of research and development (R&D) expenditure on economic growth is reported. However, when R&D interacted with governance, a positive and significant impact was observed. This implies that for R&D to have a positive impact on economic growth, there is a need for strong and quality governance to provide a conducive productive environment. Furthermore, given the ambiguous relationship between governance and economic growth, the Granger causality test results showed that governance granger-causes economic growth and not the other way round. The findings presented in this paper are expected to provide some useful insights for policymakers in South Africa and the African continent. The findings demonstrate the important role that governance plays in enhancing the developmental performance of critical macro-economic growth factors. The study potentially generates new dimensions (by including governance as a mediating factor) in the understanding of how the impact of R&D and other macroeconomic parameters on economic growth can be promoted.

Green Technological Advances and Resource Rents as Levers for Carbon Reduction in BRICS: Implications for SDGs 7, 8, 9, 12, and 13

ABSTRACTIn recent decades, rapid development in emerging economies has heightened climate challenges, threatening environmental sustainability and quality. In response, green energy, technological innovation, and carbon pricing strategies have emerged as key tools for environmental mitigation and promoting green economic growth. These strategies are integral to the goals of COP 27, the 2030 SDGs, and the pledge to reach carbon neutrality by 2060. However, the BRICS economic bloc faces significant obstacles in balancing socio‐economic growth with environmental sustainability. This study intentions to inspect the impact of natural resource rents, research and development (R&D) expenditures, green energy, green technological innovation, and economic growth on carbon emissions in BRICS economies from 1995 to 2021. Using a cross‐sectional ARDL model, the study explores relationships between these variables, employing advanced panel methods to account for CSD and heterogeneity. The empirical findings reveal that research and development expenditure, green energy, and green technological innovation contribute to CO2 emission reductions by 0.329%, 0.211%, and 0.148%, respectively. In contrast, a 1% increase in economic growth and natural resource rents corresponds to a substantial 0.499% and 0.840% upsurge in CO2 emissions. The Dumitrescu and Hurlin panel causality test also highlights reciprocal causal relationships among the variables. Based on these findings, the study recommends policy actions to achieve SDG targets: enforce stricter CO2 emissions regulations for SDG‐13, increase renewable energy investment for SDG‐07, support green innovation for SDG‐08, enhance R&D for SDG‐09, and promote circular economy practices for SDG‐12.

Issuance of urban investment bonds and high-quality urban economic development

High-quality economic development is a significant issue in China's new era, wherein an active government plays a crucial role in the rational allocation of public resources. This study examines the impact of urban investment bond issuance on the high-quality development of urban economies using panel data from Chinese cities. It further explores the specific mechanisms and regional heterogeneity of this impact. By clarifying the fundamental attributes and channels of influence of urban investment bonds, this study incorporates regional debt elements as a unique factor into the spatial Durbin model to investigate their specific spatial spillover effects, aiming to broaden and enrich economic growth theory. The findings reveal that urban investment bond issuance significantly promotes high-quality urban economic development and has a positive spatial spillover effect. The primary mechanisms include alleviating fiscal pressure, enhancing research and development expenditure, and increasing educational spending. Heterogeneity analysis indicates that the promotion effect of urban investment bonds on high-quality urban economic development is not significant in central and western cities. This study provides theoretical and practical insights into accurately understanding the relationship between government-issued urban investment bonds and high-quality economic development and aids different regions and cities in identifying their unique positions to implement tailored debt issuance strategies.

Innovation of listed firms and new business formation: evidence from China

ABSTRACT Using data from Chinese prefecture-level cities between 2006 and 2020, this study presents new causal evidence to the knowledge spillover theory of entrepreneurship, showing that research and development expenditures of listed firms significantly promote new business formation in the same city. We address endogeneity issues, account for alternative mechanisms, and consider knowledge spillover from mature firms to entrepreneurs as a plausible explanation. Consistent with this explanation, the effect is more pronounced in innovation-driven entrepreneurship and knowledge-intensive industries, and diminishes with distance. Furthermore, cities with a favourable business environment, particularly with increased government services for enterprises, exhibit more prominent effects.

What is the Role of Social Capital in the Innovation Creation Process? Evidence from the European Union

This study empirically analyzes whether social capital has any role in shaping the innovation creation process in 25 members of the European Union over the period 2013-2021. In this context, the innovation model is constructed utilizing balanced panel data and hierarchically estimated with the Poisson Pseudo Maximum Likelihood (PPML) method which is the most appropriate method since the model includes some negative values and count data. The finding strongly supports the encouraging effect of social capital on innovation since it is statistically significant and positive in all model specifications. Besides, the innovation creation process is positively associated with human development, research and development expenditure, population, government effectiveness, and income per capita. When comparatively evaluated estimation results, human development, and social capital lead to forth in terms of contributing more innovation creation process. As a core result of the study, social capital may be considered the workhorse for the innovation creation process since it promotes better coordination of activities through improved interpersonal interactions, increased community trust, and vision-sharing, leading to increased market efficiency and decreased costs. Therefore, it is recommended that these countries develop strategies to enhance their social capital and implement policies to increase especially in bridging and linking social capital, which generates a competitive advantage over their rivals.

The impact of research and development on the economies of countries of the world: A statistical analysis

Effective management of national science and research is on the constant rise, so the task of revealing how economic “return” from the research and development sector can be maximized is becoming more and more relevant. The article examines the mutual influence of the development of science and the funding of research and development in 97 countries around the world, on the one hand, and their national per capita incomes, on the other hand. A wide range of indicators is used, including patent activity, research and development expenditures, the number of researchers and the number of Scopus-indexed publications by subject area (relative to the population of countries). Among all the subject areas studied, the number of publications in economics is most closely related to the level of GDP per capita (PPP). We then use linear multiple regression to study the relation between the number of Scopus-indexed publications in economics and expenditures on research and development. A comparison of simulated data with real data shows that oil and gas producing countries (including Russia) demonstrate an economic level higher than expected. The leading world economies (USA, China, Japan, Germany, France, Great Britain) are well described by our resulting model. Ensuring high expenditure on research and development is of paramount importance for modern economic growth. In addition, an overall high level of publication activity is important, with particular attention to the development of research in economics.

The macroeconomic determinants of trade openness in Latin American countries: A panel data analysis

Background Trade openness shows a positive impact on economic growth, supported by economic theory, and export diversification and economic complexity show a positive dynamic in trade openness in the world; however, a specificity is generated in South American countries. Therefore, the objective of the research is to analyse the macroeconomic determinants of trade openness in Latin American countries. Methods The research approach was quantitative and explanatory using panel data methodology from the databases of the World Bank, Harvard University and the Economic Commission for Latin America and the Caribbean for the period 2000-2020. Results The fixed effects panel data model showed that the variables that had a negative impact on trade openness were GDP, the economic complexity index and the logistic performance index, while the variables that had a positive impact were exports of high-tech products (a proxy for innovation), exports, imports, research and development expenditure and interregional trade in goods. Conclusions Therefore, during the analysis period of 2000-2020 in South America, based on the panel data analysis under fixed effects, a total of 8 countries had a negative impact on trade openness, and only the economies of Chile, French Guiana, and Brazil had a positive impact on trade openness; these economies are characterized by their better performance in the economic complexity index, their higher percentage of budget for research and development expenses, and their trade policies oriented towards the industrialization of their value-added products.

Start Switch for Innovation in “Construction Sequencing”: Research Funding

Clusters of knowledge-intensive industries and manufacturing industries form industrial agglomeration in Step I and activate innovation in Step II. Industry clusters are formed by building segments. “Construction sequencing” in the construction industry refers to the process of determining the sequence of segments to optimize a project’s resources, budget, and scheduled timeline. The process usually begins by dividing a project into segments. Urban segments consist of public spaces, airports, factories, health, housing, etc. A “segment” is a component of a cluster; the organization of a cluster consists of constructing segments. These segments can be divided into four main categories: human resources, physical infrastructure, institutions, and the living environment. Each segment has a specific function in the process of building a cluster. This study focused on innovation in Step II and extended the Fujita–Thisse model of spatial economics to hypothesize that research expenditure per researcher leads to value being added. The Granger causality was tested for the knowledge and manufacturing industries in nine major countries including China and the U.S. The results showed that the hypothesis was significant in identifying the starting segment of innovation in Step II. Accordingly, it can be concluded that research funding is the start switch that triggers innovation. The policy implication is that activating innovation in cluster policies begins with the establishment of a research fund for researchers in its assigned clusters.

Austrian FDI in Asian economies: Does knowledge capital matter?

PurposeWhile Austrian foreign direct investment (FDI) in Asian economies experiences a rising trend, the following question arises: Why does Austria invest more in certain economies over others? This study intends to assess the factors that drive Austrian investment in Asian economies.Design/methodology/approachBased on the ownership, location and internalization framework and the knowledge capital approach, this study hypothesizes that knowledge capital significantly attracts FDI from Austria. Meanwhile, this study applies the panel-corrected standard error method to analyze data for 11 Asian economies from 1990 to 2022.FindingsAfter considering endogeneity, the results show a positive and significant correlation between expenditure in research and development per gross domestic product (GDP) in the host economies and FDI inflow from Austria. In addition, the study reveals that factors such as market size, trade openness and natural resources in the host economies significantly influence Austria’s FDI, which indicates that Austrian investors fall into the three main FDI typologies: market-seeking, resources-seeking and efficiency-seeking.Originality/valueThis study fills the literature gap by becoming the first to analyze the determinants of Austrian FDI in Asian economies, thus enriching our understanding of Austria’s global investment pattern.

Innovation, Global Competitiveness and Human Development Index: EU Cluster Case

This study investigates the effects of innovation on global competitiveness within the framework of the EU13 and EU15 countries. Using a Pooled Driscoll and Kraay regression analysis that takes into account unit and time effects, the research illuminates the relationship between the Human Development Index (HDI), which represents Global Competitiveness, Research Expenditure, the Number of Researchers, the Number of Patents, and the Human Capital Index. The findings reveal that while the number of researchers and research expenditure lack a statistically significant effect on HDI in both groups, a significant positive correlation was found between HDI and both the number of patents and human capital. More specifically, for EU13 countries, an increase in the number of patents and human capital leads to respective increases of 0.005 and 0.04 in the HDI, while for EU15 countries, these figures stand at 0.0008 and 0.03 respectively. The study concludes that investment strategies aimed at enhancing human capital and increasing the number of patent applications can notably improve global competitiveness. For EU13 countries, in particular, greater effort in the mentioned areas is needed to narrow the gap with their EU15 counterparts. In addition, despite the indirect impact on competitiveness, it is recommended for EU13 countries to boost their R&D investments and foster technological transfer to enhance their innovation capabilities. The findings from this study underscore the pivotal role of innovation in achieving global competitiveness and suggest a need for stronger collaboration within the European Union, particularly in scientific and technological fields, to facilitate knowledge and skill exchange.

DOMINANTS FOR THE NATIONAL ECONOMIES’ COMPETITIVENESS

This article is devoted to innovation as a prerequisite for the national economies' sustainable development and a domain for their global competitiveness. The paper aims to highlight the internal essence of mutual relations between innovation, competition, and economic growth. It was assumed that innovation positively affected the competitive behaviour of economic agents and eventually contributed to an increase in public welfare. Regarding the period from 2007 to 2022, we considered the sample of Central European countries and the Baltic states. Theoretical generalization has been applied to systematize the factors determining competition and innovation. We used statistical methods and comparative analysis to investigate the indicators' dynamics. The interdependencies between macroeconomic dynamics and a set of competition and innovation indicators have been assessed. It was proved that the proportion of medium and high-tech industry value added in the total value added of manufacturing was quite important, yet not the ultimate criterion for ensuring high growth rates and sustainable development. The dynamics of commercial spending on research and development had been ambiguous and unsustainable. To ensure strategic competitiveness, national governments should encourage innovation in their respective business communities. The sampled economies have been examined considering a set of innovation and competition indicators (e.g., gross capital formation, research and development expenditures, logistics performance, export technological structure, carbon dioxide emission, and renewable energy consumption). Considering the implications of globalization, tax burden as an integral characteristic of the national economy's competitiveness has been evaluated as well. It was pointed out that: a) a stable, understandable and transparent tax policy should be implemented to protect the investors' property rights; b) a system of total anti-corruption measures aimed at preventing the practices of receiving undue benefits should be set; and c) the business sector should improve own environmental and social responsibility complexly, introduce resource-saving, green and circular economy.

The Interplay of Foreign Direct Investment in Unravelling the Nexus of Technological Innovation and Economic Dynamics: An Integrated Study Using Vector Error Correction Model

Most lower-middle income countries prioritise innovation, with foreign direct investment (FDI) as a key funding source for sustainable development. This article studies the interplay between FDI, technological innovation (measured by patent-granted residents), gross domestic product (GDP), research and development (R&D) expenditure (RDE) and inflation of the Indian economy from 2002–2003 to 2022–2023. It uses a vector error correction model, Johansen cointegration tests, Granger causality tests, the impulse response function and variance decomposition. The study finds two cointegration relationships between the variables. GDP and RDE have a significant positive effect on technological innovation in the long term. Neither FDI nor inflation shows such an impact. FDI policies should therefore consider factors such as a conducive regulatory framework, tax breaks and grants for R&D to enhance their impact on innovation. JEL Codes: O31, O32, F21, F23, E01, O47

The positive impact of corporate mergers on consumer welfare: from the perspective of corporate R and D investment

Enterprise mergers are essential for the development and growth of enterprises, and they are also an important mechanism for the market economy to improve the overall efficiency of the market through the survival of the fittest. Compared to gradually growing a company through internal accumulation, merging with other companies can achieve various goals such as scale expansion, business expansion, and financial optimization faster in a short period. Although business mergers are spontaneous actions of enterprises, the merger of enterprises, especially large enterprises, affects their performance and consumer welfare. To better study the potential impact of corporate mergers, this article combines traditional and modern merger theories to investigate the positive effects of corporate mergers on product prices, corporate innovation, and overall consumer welfare. The impact channels of Chinese-listed company mergers on their R&D expenses are evaluated empirically. Through empirical and theoretical analysis, this article proves that business mergers can improve efficiency, innovation, and consumer benefits by increasing research and development expenditures.

Assessing Regional Economic Performance in Romania Through Panel ARDL and Panel Quantile Regression Models

This study aims to address the persistent regional economic disparities in Romania by evaluating economic performance through Panel Autoregressive Distributed Lag (pARDL) and panel quantile regression (PQR) models. The analysis focuses on the impact of key economic variables, including research and development expenditures (CTCRD), IT infrastructures (IT), the number of universities (FCL), and the average number of employees (NMSP), on regional gross domestic product (GDPR). Using data from the Romanian National Institute of Statistics for the period 2003–2022, this research seeks to understand how targeted investments and policy interventions can stimulate growth and reduce inequalities across regions. The findings highlight the important role of R&D, IT infrastructures, and technological advancements in driving economic growth, especially in less developed areas. The study also emphasizes the importance of region-specific strategies in fostering sustainable growth, promoting economic resilience, and bridging the gap between more and less prosperous regions.

Assessing the internationalization dynamics of emerging markets: a comprehensive analysis utilizing SWARA-WASPAS techniques

Purpose This paper aims to evaluate the internationalization of countries represented in the MSCI Emerging Markets Index. The evaluation considers high-technology product imports, foreign direct investments, research and development expenditures, patent and industrial design applications, exports and gross domestic product (GDP) data, representing production. Design/methodology/approach This paper uses the Step-Wise Weight Assessment Ratio Analysis (SWARA) method to assess and rank the criteria for evaluating emerging markets. Four academics who are authorities in the field of foreign trade were consulted to weigh the criteria. The Weighted Aggregated Sum Product Assessment (WASPAS) method, considered one of the most reliable and robust MCDM techniques, was then used to evaluate and rank the countries. Findings The findings obtained during the research process reveal the internationalization dynamics of these countries based on the indicators they possess. As a result, it is observed which countries achieve higher performance in the internationalization process based on relevant criteria. Originality/value This study is theoretically unique and valuable as it simultaneously offers the potential for development to macro-level international trade theories, such as the technologic deficit hypothesis, and meso-level internationalization theories, such as the Uppsala model. Additionally, integrated multiple criteria decision-making (MCDM) methods, which are not frequently used in cross-country studies, have been used, and the performance of emerging markets has been ranked. The findings obtained from this application distinguish the research from the existing literature by transforming it into a performance ranking rather than focusing on the antecedents or consequences of internationalization and their interactions.

Exploring the impact of financial development on energy intensity in a global study: Do levels of innovation and technology matter?

The present study aims to investigate the effect of financial development on energy intensity (EI) at different levels of innovation and technology. In addition, this study seeks to answer whether financial development affects EI and how such effect alters in the presence of varying levels of innovation and technology. To this aim, a panel smoothing transition regression (PSTR) method was used on a sample of OPEC + countries during 2000–20. Sectors of financial development affect EI at various levels of innovation and technology differently. Based on the results, the development of the banking sector and stock market increases EI to a certain level of the threshold variable (0.28 and 0.21 %, respectively), which is research and development (R&D) expenditure as a percentage of gross domestic production (GDP). Total financial development affects EI slightly differently. The above-mentioned process reduces EI up to a certain level of the threshold (0.25 %). Then, the process decreases EI more significantly. The present study aims to assess the specific effect of financial development on EI based on the level of innovation and technology. The results indicate that the behavior of the evaluated countries, which plays a significant role in proven oil reserves, crude oil production, and oil trade in the world, becomes similar to that of developed countries after reaching a certain threshold level of innovation and technology.

Enabling university and regional conditions to create a thriving entrepreneurship ecosystem

ABSTRACT Can higher education institutions (HEIs) create conditions for a thriving entrepreneur ecosystem? This study analyzed HEIs’ innovation output and measured university leader (UL) perceptions and attitudes toward innovation and entrepreneurship ecosystems (EE) by examining medium-sized HEIs with $200 to $300 M in research expenditures located in cities with a population of 250,000 to 500,000 to determine potential gaps in developing entrepreneurs and spurring start-up opportunity. A mixed-method design investigated HEIs’ innovation by building on existing frameworks to identify common attributes of an EE. Given the complexity, challenges, and underdeveloped literature associated with EEs, this article tested a proposed framework for ULs, scholars, practitioners, and policy makers to inform decisions for increased innovation output and start-up creation. The results provide practical recommendations on how leaders can create conditions to spur continued innovation and entrepreneur opportunity for organic start-up growth and economic development.

The macroeconomic determinants of trade openness in Latin American countries: A panel data analysis

Background Trade openness shows a positive impact on economic growth, supported by economic theory, and export diversification and economic complexity show a positive dynamic in trade openness in the world; however, a specificity is generated in South American countries. Therefore, the objective of the research is to analyse the macroeconomic determinants of trade openness in Latin American countries. Methods The research approach was quantitative and explanatory using panel data methodology from the databases of the World Bank, Harvard University and the Economic Commission for Latin America and the Caribbean for the period 2000-2020. Results The fixed effects panel data model showed that the variables that had a negative impact on trade openness were GDP, the economic complexity index and the logistic performance index, while the variables that had a positive impact were exports of high-tech products (a proxy for innovation), exports, imports, research and development expenditure and interregional trade in goods. Conclusions Therefore, during the analysis period of 2000-2020 in South America, based on the panel data analysis under fixed effects, a total of 8 countries had a negative impact on trade openness, and only the economies of Chile, French Guiana, and Brazil had a positive impact on trade openness; these economies are characterized by their better performance in the economic complexity index, their higher percentage of budget for research and development expenses, and their trade policies oriented towards the industrialization of their value-added products.