Theory Of Economic Growth Research Articles

Effects of product and process innovation on growth and unemployment

In economic growth theory, product and process innovations are critical factors contributing to technological progress. This study constructs an economic growth model that considers product and process innovations and theoretically investigates how these two types of innovation affect economic growth and unemployment rates. Using our model, based on Zagler (Int Rev Appl Econ 18:209–224, 2004), we obtain the following three main findings: (1) an increase in the efficiency of product innovation increases both the economic growth and unemployment rates; (2) an increase in the efficiency of process innovation increases the economic growth rate but does not affect the unemployment rate; and (3) a decrease in labor allocation to product innovation and an increase in labor allocation to process innovation in the R & D sector increase the economic growth rate and decrease the unemployment rate depending on the conditions. These findings suggest that to simultaneously raise employment and increase economic growth, we need not only a policy for fostering product innovation but also another policy to improve employment.

Foreign direct investment, total factor productivity, and economic growth: evidence in middle-income countries

This study examines the relationship between foreign direct investment and total factor productivity on economic growth in 90 middle-income countries. Because middle-income countries often face particular challenges in achieving sustainable economic development. Investigating how FDI and TFP contribute to or hinder economic growth in these countries can provide insight and help policymakers make policy decisions. We employ the dynamic system Generalized Method of Moments to analyze an unbalanced sample with 2714 annual observations from 1990 to 2020. The empirical results show that a percentage increase in foreign direct investment will increase economic growth in middle-income countries by 9.3%. In addition, Total Factor Productivity also has a positive relationship with economic growth due to improved labor quality and production innovations. Furthermore, the results indicate that Total Factor Productivity empowers the positive nexus between Foreign Direct Investment and economic growth. In addition, the main findings are also robust even though we employ alternative economic growth proxies. These findings support economic growth and industrialization theories but do not support labor market dynamics theories. Finally, this study contributes practical suggestions for sustainable economic development in middle-income countries.

The relationship between transport infrastructure and output growth in rural nodal municipalities within South Africa

Transport infrastructure is an integral part of economic and social development in many countries, including South Africa. Economic growth theories state that a sound transport system enhances accessibility and output. Despite this, rural areas in South Africa face widespread poverty, poor infrastructure and limited access to essential services. This paper aims to examine the impact of transportation infrastructure investment on the output growth of rural nodal district municipalities in South Africa. This study focuses on two main objectives 1) investigating the relationship between transport infrastructure investment and output growth in rural nodal district municipalities and 2) understanding the causal relationship between transportation infrastructure investment and output growth in rural nodal district municipalities—this analysis uses panel data from 2012 to 2019. We used Fisher type (ADF and PP) panel unit root tests (Maddala & Wu,1999) to determine if the variables were stationary. Additionally, we employed Pedroni tests (1999) to ascertain the presence of cointegration among the variables. Once cointegration was confirmed, our study utilised the Panel VECM. A Panel Granger was then conducted to analyse the direction of causality between transportation infrastructure investment and output growth. This study recommends that the government should improve investments in transportation to improve the output of rural nodal district municipalities.

Analysis of green productivity in manufacturing based on different air pollution levels

China’s manufacturing industry needs to change from a high-emission model to one that is more environmentally friendly to reduce air pollution and achieve sustainable growth. Therefore, it is important to decrease manufacturing waste gas emissions by improving green productivity. This paper expands on the theories of green economic growth and sustainable development to present a framework for analysis of manufacturing green productivity at various levels of air pollution. It applies the Metafrontier Malmquist Luenberger index and SBM model to data from 30 Chinese manufacturing sectors from 2012 to 2022 to identify the obstacles to developing green productivity in the manufacturing sectors. The results show that: (1) From 2012 to 2022, the overall waste gas emission efficiency and GTFP of China’s manufacturing industry showed an increasing trend. (2) The manufacturing industry with light air pollution had the fastest growth in GTFP, followed by manufacturing with heavy air pollution, and manufacturing with moderate air pollution had the lowest. (3) The primary driver of GTFP growth is technological progress, while technical inefficiency has severely hindered GTFP growth. (4) There is a “Matthew effect” in the green productivity of China’s manufacturing industry. High waste gas emission efficiency often accompanies high levels of GTFP, and vice versa. Finally, this paper proposes policy suggestions to improve the green productivity of the manufacturing industry and reduce air pollution.

A Study on the Role of Engineering Materials Innovation in Urban Infrastructure Development in Promoting Economic Growth

Accompanied by the high speed of infrastructure construction in China’s major cities, China’s construction industry has been growing rapidly, and the engineering materials industry in construction has begun to transform from weak to strong. The study constructs a systematic theoretical model of engineering materials innovation in the construction industry to realize a systematic understanding of the engineering materials innovation mechanism. Combined with the economic growth theory, the impact of engineering materials innovation on regional economic growth in major Chinese cities is explored by using the threshold regression model. Through the study, it is found that the current innovation of China’s engineering materials industry is mainly facing two major problems, namely the slowdown of industrial growth rate, and the reduction of fixed asset investment, while the diversification path of engineering materials technological innovation outputs is beginning to diverge, and the diversity and ubiquity indices are gradually increasing, but the growth rate is slowing down. Threshold regression shows that when engineering materials innovation every 1% growth, for regional economic growth (GDP) to promote the role of between 0.099%~0.112%. The research in this paper provides a new perspective and comprehensive explanation for the study of engineering materials innovation-driven economic development, enriches the theoretical study of regional economic growth, and also provides theoretical insights and practical guidance for the government’s policy making and enterprises’ innovation practice.

Теория эндогенного роста: исследование исторических предпосылок и ретроспективных особенностей эволюции в рамках отдельных макроэкономических парадигм и моделей экономического роста

To date, the main research on macroeconomic theory identifies five main factors of economic growth that will be decisive in the coming decades: population and human capital; capital and capital markets; globalization and trade; technology and innovation, as well as new frontiers for productivity growth. It remains an undeniable fact that innovations stimulate modern economic growth. At the same time, in the process of its evolution, any macroeconomic paradigm faces certain limitations associated with changes in the socio-economic system of society, and as a result, there is a need to rethink what are the historical prerequisites and retrospective features of the evolution of the endogenous macroeconomic theory of economic growth. The purpose of the article is to study the nature of similarities and contradictions, and the nature of the mutual influence of various macroeconomic paradigms within the framework of the evolution of the endogenous macroeconomic theory of economic growth; the roles of generalizing and separating factors that cause the emergence and development of individual elements of this macroeconomic paradigm. The scientific novelty of the article is presented by the author’s new critical view of the study of historical prerequisites and retrospective features of the evolution of individual macroeconomic theories and models of economic growth, especially the endogenous growth model, in order to show that the nature of innovation itself has an ambiguous assessment from the side of macroeconomic science.

Does the size of the housing rental market stabilize regional economic fluctuations? Evidence from China's large- and medium-sized cities

The influence of the housing rental market on economic operations is a significant concern. Particularly in China, the rental market has been undergoing a transition from being disregarded to being valued. Based on an analytical framework referencing the three-sector theory of metropolitan economic growth, this study explores the impact of rental market size on regional economic fluctuations and its influence channels using a panel of 69 large and medium-sized cities from 2010 to 2019. The results indicate that increased rental market size is significantly correlated with decreased regional economic fluctuations through housing sales and labor market channels. Specifically, house price depression, house investment stability, labor allocation, and employment stability effects are crucial channels through which the size of the rental market influences regional economic fluctuations. In addition, the marginal effect of rental market size on regional economic fluctuations is smaller in cities with higher economic development. The conclusions imply that policymakers should not focus on how to unilaterally expand the housing rental market, but should strategically compensate for the defects of regional housing rental–related institutional systems.

Directional nature of technological progress in the petrochemical industry prompting energy marginal substitution

Technological progress does not uniformly benefit all industries or factors' productivity levels. The energy productivity and labour employment situation in the Chinese petrochemical industry have not witnessed substantial improvements in the last decade. The literature has overlooked the importance of recognizing the directional nature of technological progress, which could enable a more strategic approach to economic development, resource allocation, and policy formulation. This study, guided by the core principles of endogenous economic growth theory, aims to uncover the influencing mechanisms and effects of technological progress bias on energy and employment by extending a theoretical model to account for energy, capital, and labour factors. The results reveal: (1) From 2000 to 2021, the relationship between labour, capital, and energy factors in the Chinese petrochemical industry has been predominantly complementary, with technological progress favouring labour-augmenting that is increasing labour productivity; (2) The gross complementarity of production factors leads to labour-augmenting technological progress, ultimately biased towards energy and capital factors; (3) Energy-capital-biased technological progress encourages producers to invest more energy and capital to substitute for labour factors, leading to a limited improvement in energy productivity and a consistent decline in labour employment since 2011. This study further corroborates that without government intervention, it would lead to improper factor allocation in the industry, resulting in market failure. Finally, corresponding policy recommendations are proposed.

Effect of CO2 emissions, Renewable Energy Consumption and General Government Final Consumption Spending on Moroccan Economic Growth: ARDL Approach

The empirical studies have shown that there is difference in association among depend and independent variables. Supported by framework’s Keynesian theory of EG (Economic Growth), present research aims to examine how economic growth (EG) Morocco is influenced by REC (renewable energy consumption), general government spending, and CO2 emissions. This research used the method of least squares ordinary assess the short- and long-term relationships between the model's variables, using an autoregressive approach for stationarity and distributed degradation. For the years 1993 to 2020, the research has gathered yearly data from WDI. According that empirical results, none independent variable were stationary at the first difference, but dependent variable was. A long-term association between the independent and dependent variables was shown by the model simulation utilizing the bound test. The White test revealed that there was no evidence of heteroscedasticity in the model residuals. The residuals have a normal distribution, as determined by the Shapiro-Wilk test, and the model exhibits stability throughout the time span with no structural fractures. The study's conclusions suggest that while the use of renewable energy sources and carbon dioxide emissions both exhibit notable positive trends, government spending on public goods has a substantial adverse association with economic growth.

Regional drivers of industrial decarbonisation: a spatial econometric analysis of 238 EU regions between 2008 and 2020

ABSTRACT The European context of socio-economic integration and physical proximity likely plays an essential role in explaining the decarbonisation outcomes of industrial sectors. However, there is hardly any spatial regional analysis on CO2 emissions drivers in European countries. This study investigates the role of geographical space and regional determinants in industrial decarbonisation by analysing how socio-economic drivers and their interregional relationships impact industrial carbon emissions in European regions. We employ a spatial panel data econometric model to a novel panel dataset comprising 13 years (2008–20) of carbon emissions from hard-to-abate industrial sectors from 238 NUTS-2 regions across 27 European Union countries. Results indicate the presence of endogenous spatial interactions and high-time persistence between CO2-eq emissions in European Union regions. As such, industrial carbon emissions of regions follow similar patterns to their neighbours, supporting the evolutionary economic geography and growth theory assumptions of the spatial interaction of carbon emissions between regions. Furthermore, the use of a spatial econometric model illustrates the negative direct and spillover effects that higher levels of education and regional investment in research and development have on industrial CO2-eq emissions.

Role of Human Capital as a Driver for Sustainable Development (SDG) in Western Balkan Countries

Objective: The objective of this study is to investigate the impact of years of education and life expectancy on the economic development of the Western Balkan Countries (Southeast Europe). Theoretical Framework: This study considers the impact of exogenous and endogenous theories of economic growth, with a particular focus on the role of human capital (human resources) in driving economic development. Method: We have proposed a panel data regression methodology in which the dependent variable is the GDP per capita. The countries analyzed are covered from 2012 to 2021 and the total number of observations in the panel is 50. This study used secondary data from the WorldBank databases. Findings: The results reveal a positive correlation between the Education Index and Labor Force Participation, while the Gross Enrollment Rate in Tertiary School and Life Expectancy show a negative correlation. Research Implications: The demographic, economic, and educational conditions in the Western Balkan countries required immediate action by policymakers to avoid a situation that cannot be sustained over the medium or long term. The governments of these nations must take action to shift the focus of higher education to a more qualitative approach.

Growth, poverty trap and escape

The well-known Solow growth model is the workhorse model of the theory of economic growth, which studies capital accumulation in a model economy as a function of time with capital stock, labour and technology-based production as the basic ingredients. The capital is assumed to be in the form of manufacturing equipment and materials. Two important parameters of the model are: the saving fraction s of the output of a production function and the technology efficiency parameter A , appearing in the production function. The saved fraction of the output is fully invested in the generation of new capital and the rest is consumed. The capital stock also depreciates as a function of time due to the wearing out of old capital and the increase in the size of the labour population. We propose a stochastic Solow growth model assuming the saving fraction to be a sigmoidal function of the per capita capital kp . We derive analytically the steady state probability distribution P(kp) and demonstrate the existence of a poverty trap, of central concern in development economics. In a parameter regime, P(kp) is bimodal with the twin peaks corresponding to states of poverty and well-being, respectively. The associated potential landscape has two valleys with fluctuation-driven transitions between them. The mean exit times from the valleys are computed and one finds that the escape from a poverty trap is more favourable at higher values of A. We identify a critical value of Ac below (above) which the state of poverty (well-being) dominates and propose two early signatures of the regime shift occurring at Ac . The economic model, with conceptual foundations in nonlinear dynamics and statistical mechanics, shares universal features with dynamical models from diverse disciplines like ecology and cell biology.

Impact of Covid-19 on the Economic Growth of ASEAN Countries: Convergence or Divergence?

This contribution addresses the question of whether economic growth among ASEAN member countries is converging or diverging within the context of the COVID-19 pandemic. ASEAN has significantly developed economic and social mechanisms aimed at achieving greater integration among member countries, with the goal of enhancing economic growth and especially accelerating the catch-up of the poorer member countries. How resilient have the member countries been? Has the COVID-19 pandemic more severely affected the poorer member countries? To answer these questions, our contribution addresses this issue based on economic growth theories, particularly drawing on Solow’s theory regarding beta and gamma convergence. The study covers the period from 2000 to 2022. In the pre-pandemic period from 2000 to 2019, there is a general phenomenon of absolute convergence, demonstrating a reduction in the disparity in absolute values between less advanced and more modern countries, which also leads to a reduction in inequality as shown by the confirmation of the σ-convergence hypothesis. This is true for both GDPC and GDPW variables. The catch-up effect of absolute β-convergence is not evident when looking at the period from 2020 to 2022. During this timeframe, both the absolute β-convergence and σ-convergence hypotheses are rejected, which slows down the economic growth of poorer economies relative to the more advanced ASEAN countries. Overall, the entire 2000–2022 period confirms the unconditional β-convergence and σ-convergence assumptions of the pre-pandemic period.

The Nexus Between Higher Education Expansion and Economic Growth in Ethiopia: An Empirical Examination

Over the past three decades, Ethiopia’s higher education system has undergone substantial expansion, marked by an increase in the number of universities from two to more than 100 and a surge in student enrollment from 48 000 to more than 400 000. Despite this growth, there is a paucity of research on the relationship between higher education expansion and economic growth, with the few quantitative studies that have been undertaken yielding inconsistent outcomes. This research study embraced endogenous economic growth theory, employed the Autoregressive Distributive Lag (ARDL) bound testing model, and used World Bank data from 1991 to 2021 to explore the relationship between economic growth (measured by GDP per capita) and the expansion of higher education (proxied by gross tertiary enrollment). Contrary to prevailing assumptions, the study uncovered an insignificant association between higher education expansion and economic growth. Unlike other studies, it used qualitative analysis to unearth the potential contributing factors and identified subpar educational quality, limited university autonomy, and constrained academic freedom as critical issues. It is recommended that policymakers in countries undergoing similar higher education expansion should not only focus on increasing the number of students, but also prioritise improving the quality of education, granting greater autonomy to universities, and ensuring academic freedom. These factors are crucial for higher education to effectively contribute to economic growth.

The Influence of Distribution of Zakat, Infaq and Sadaqah (ZIS) Funds and Economic Generation on the Social Welfare of the City/Regency Level in East Java in 2021-2023

Economic development is an important strategy in achieving social prosperity, and many development theories emphasize the importance of economic growth as the key to reducing poverty and increasing the level of welfare. One approach that is widely known is the theory of economic growth which places economic growth as the main priority in efforts to overcome the problem of poverty and achieve a higher level of prosperity. This research uses quantitative research with quantitative descriptive analysis and path analysis techniques with the help of the Eviews 12 program. Research results: Distribution of Zakat, Infaq and Alms Funds (ZIS) and economic growth have a partial and simultaneous effect on the welfare of the City/Regency community in East Java 2021-2023.

Dynamic linkages between human capital, natural resources, and economic growth – Impact on achieving sustainable development goals

This study examines the impact of economic growth, trade dynamics, natural resources, human capital, and sustainable development from 1990 to 2022. To capture the complexity of these factors, we utilize a Novel Dynamic Semi-parametric Additive Panel model. Additionally, we employ a Dynamic panel thresholds model to explore the sensitivity of natural resources to economic development across various indices, addressing a gap in previous nonlinear technique studies. Our findings diverge from conventional financial development and economic growth theories. While increasing money may boost trade and development, it could hinder sustainable development. Interestingly, the relationship between financial market expansion, economic improvement, and natural resource use follows an inverse “U-shaped” non-linear pattern. Furthermore, the expansion of the financial sector significantly affects the interplay between human capital and natural resources. As thresholds of growth in financial markets rise, economic growth contributes more to sustainable development, mitigating its negative impact. Several implications emerge, particularly regarding minimizing energy deprivation through global economic and developmental strategies.

Development and Mode Innovation of Cultural Tourism Resource based on Industrial Integration

The cultural tourism industry contributes to the growth of both cultural and tourism industries. Cultural Tourism Resource (CTR) is the prerequisite for the integrated development of the cultural tourism industry. Developing potential CTR can promote the new transformation and upgrading of the urban cultural tourism industry. Luoyang has the advantages of location and resources in the development of CTR, but its tourism industry develops slowly. Therefore, Luoyang City was taken as the research object and the relevant evaluation index system was established. The entropy method and grey correlation model were used to analyze the development trend and influencing factors of the city’s CTR. The entropy values of the eight indicators of the evaluation system of CTR established in the study were all above 0.96, indicating that the evaluation system was relatively stable. The grey correlation degree of CTR of historical culture and folk customs was high, which was 0.668 and 0.642, respectively. The grey correlation degree of religious culture and calligraphy and painting CTR was low, which was 0.625 and 0.617, respectively. The CTR of historical culture and folk customs have developed well, but the resources of religious culture, calligraphy, and painting need to be improved. The knowledge of cultural tourism location theory and regional economic growth theory are applied. According to the evaluation results and problems of the development of CTR in Luoyang, this paper puts forward targeted strategies for CTR.

Foreign Direct Investment (FDI) And Economic Growth in Nigeria

Purpose: The aim of the study was to analyze the foreign direct investment (FDI) and economic growth in Nigeria. Methodology: This study adopted a desk methodology. A desk study research design is commonly known as secondary data collection. This is basically collecting data from existing resources preferably because of its low cost advantage as compared to a field research. Our current study looked into already published studies and reports as the data was easily accessed through online journals and libraries. Findings: FDI positively impacts Nigeria's economic growth by fostering capital formation and technology transfer. However, this relationship is influenced by factors like institutional quality and governance effectiveness. Challenges such as infrastructure deficits and policy instability hinder FDI's full potential. Thus, creating a favorable investment climate and implementing sound economic policies are crucial for sustainable economic growth in Nigeria. Unique Contribution to Theory, Practice and Policy: The theory of foreign direct investment (FDI) and economic growth, the dependency theory & the institutional theory may be used to anchor future studies on analyze the foreign direct investment (FDI) and economic growth in Nigeria. Fostering investment in sectors such as manufacturing, agriculture, and technology can contribute to economic diversification, employment generation, and skill development, thereby fostering sustainable economic growth. Nigerian authorities should focus on improving the investment climate by implementing reforms aimed at reducing bureaucratic hurdles, streamlining business processes, and enhancing transparency.

Role of Human Capital as A Driver For Sustainable Economic Growth in Western Balkan Countries

Objective: The objective of this study is to investigate the impact of years of education and life expectancy on the economic development of the Western Balkan Countries (Southeast Europe). Theoretical Framework: This study considers the impact of exogenous and endogenous theories of economic growth, with a particular focus on the role of human capital (human resources) in driving economic development. Method: We have proposed a panel data regression methodology in which the dependent variable is the GDP per capita. The countries analyzed are covered from 2012 to 2021 and the total number of observations in the panel is 50. This study used secondary data from the WorldBank databases. Findings: The results reveal a positive correlation between the Education Index and Labor Force Participation, while the Gross Enrollment Rate in Tertiary School and Life Expectancy show a negative correlation. Research Implications: The demographic, economic, and educational conditions in the Western Balkan countries required immediate action by policymakers to avoid a situation that cannot be sustained over the medium or long term. The governments of these nations must take action to shift the focus of higher education to a more qualitative approach.

Economic psychology for laymen

Neuroeconomics can now replace the Paradigm of Bounded Rationality (BR) by a rooting in positivist economic psychology. The key finding is that the neuroeconomic Model of Decision-Making (NeM), based on neuroeconomic trials, suspends subjectivism, identifying risk-willingness as a basal parameter of economic behavior. Further, NeM and behavioral psychology (Big5 Taxonomy) integrates correlation studies into an Economic Psychology that simplifies Sensi-training in the Big5 to persons without specialism in Psychology. Finally, this Economic Psychology implicates a new interdisciplinary outlook on three domains of Economics: Evidence of the Florida Thesis on the Rise of the Creative Class as a qualitative growth effect A positivist framework for modern stress-management by classical meditative in-depth relaxation Recognition of prejudices as a special problem of behavioral science due to the interaction of subject and object Discussion focuses on the significance to economic growth theory to abandon BR. The conclusion is, that the simple model of accounting real growth in GDP, must be replaced by a tripartite model already termed 3P in management research (Planet, Personnel and Profit) including negative growth factors, too. The 3P has a common outcome in Quality-Adjusted Life Years (QALY) which at the global level has a negative aggregated value in the 21 Century. So, political measures to counterbalance, for instance the damage to the climate, are discussed concluding an urgent need for a global CO2 Tariff (ET).