Externalities of R& D, Institutions, and Growth: Empirical Validation for the Case of Developing Countries

By Sahbi Gabsi

Coe and Helpman (1995) were the first economists who have shown that total factor productivity depends not only on the domestic stock of knowledge but also on the foreign stock of knowledge. In this context, this article aims to determine to what extent the quality of institutions and good governance are considered as key factors in the relationship between R&D policies and economic growth. It examines the role of institutions in explaining why some developing countries benefit more than others from international R&D spillovers of advanced countries. A Panel data method was applied over the period 1996-2007 for 24 developing countries. The results suggest that quality of institutions is a crucial and complementary relationship between the R&D policy and economic growth. JEL codes: O3, O43, O47, C23


  • externalities in R&D
  • quality of institutions
  • economic growth
  • panel data
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