Drivers of national innovative systems in transition: an Eastern European cross-country analysis

Krammer, Marius /S.S. (2008): Drivers of national innovative systems in transition: an Eastern European cross-country analysis. Forthcoming in:

Abstract

Innovation plays a crucial role in determining today’s economic growth patterns. But what enables some countries to innovate more than others? This paper employs in premiere a panel of sixteen Eastern European countries throughout their transition period exploring empirically the drivers of their innovative capacity using as a proxy the number of patent granted in the USA. The econometric analysis confirms the importance of R&D commitments and innovative tradition in the form of existing knowledge stock. Increased trade openness and intellectual rights protection determine higher international patenting, while the transition specific factors, such as structural industrial distortions or aggregated output drops, have a significant negative influence. Governmental funding and research performance of universities encourage more innovation at the technological frontier, while the business R&D funding in Eastern Europe is negatively correlated with it.

• Item Type: MPRA Paper
• Language: English
• Keywords: National innovative systems; Transitional Economies; Patents; Eastern Europe
• Subjects: P - Economic Systems > P2 - Socialist Systems and Transitional Economies; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O57 - Comparative Studies of Countries; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights

References

Acs, Z. J., Anselin, L., Varga, A., 2002. Patents and innovation counts as measures of regional production of new knowledge. Research Policy, Elsevier, vol. 31(7), pages 1069-1085.

Bucar, M., Stare, M., 2006. From Quantity to Quality: Critical Assessment of Slovenia's Potential for the Knowledge-based Economy, in: Piech, K., Radosevic, S. (Eds.), The Knowledge-Based Economy in Central and East European Countries and Industries in a Process of Change, Palgrave Macmillan.

CIA The World Factbook, 2006.

Coe, D., Helpman, E., 1995. International R&D spillovers, European Economic Review 39(5), Elsevier.

Djankov, S., La Porta, R., Lopez-De-Silanes, F., Shleifer, A., 2002. The Regulation Of Entry. The Quarterly Journal of Economics, MIT Press, vol. 117(1), pp. 1-37.

European Innovation Scoreboard. Comparative Analysis of Innovation Performance, 2006.

Freeman, C. 1982. Technological infrastructure and international competitiveness. Draft paper submitted to the OECD Ad Hoc Group on Science, Technology and Competitiveness (mimeo).

Furman, J., Porter, M., Stern, S., 2002. The determinants of national innovative capacity. Research Policy, 31, pp. 899-933

Furman, J., Hayes, R., 2004. Catching Up or Standing Still? National Innovative Productivity among ‘Follower’ Nations, 1978-1999. Research Policy 33, pp. 1329-1354.

Gheorghiu, R., Turlea, G., 2006. The Need for a New Paradigm in Policy Making for the Knowledge-based Economy: Stimulating the Knowledge Production in Romania, in: Piech, K., Radosevic, S. (Eds.), The Knowledge-Based Economy in Central and East European Countries and Industries in a Process of Change, Palgrave Macmillan.

Ginarte, J., Park, W., 1997. Determinants of patent rights: A cross-national study. Research Policy, Vol. 26, pp.283-301.

Glass, A.J., 2004. Intellectual Property Protection and International Technology Diffusion. Working paper. Available: http://econweb.tamu.edu/aglass/ippitd.pdf

Griliches, Zvi, 1990. Patent Statistics as Economic Indicators: A Survey. Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1661-1707.

Hall, B., Jaffe, A., Trajtenberg, M., 2001. The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools. NBER Working Paper 8498, 2001.

Hu, M.C., Mathews, J.A., 2005. National Innovative Capacity in East Asia. Research Policy Vol. 34, pp.1322-1349.

Im, K., Pesaran, M., Shin, Y., 2003. Testing for unit root in heterogeneous panels. Journal of Econometrics 115 (1), pp. 53-74.

Jones, C., 2001. Introduction to Economic Growth. Second Edition, Norton.

Kanwar, S., Evenson, R., 2001. Does Intellectual Property Protection Spur Technological Change. Working Papers 831, Economic Growth Center, Yale University.

Kubielas, S., 2006. The Polish Economy between Transition and Knowledge-based Growth: From Ricardian Success to Schumpeterian Decline, in: Piech, K., Radosevic, S. (Eds.), The Knowledge-Based Economy in Central and East European Countries and Industries in a Process of Change, Palgrave Macmillan.

Léger, A., 2005. Intellectual Property Rights in Developing Countries: Do they play a role?. World Development, 33(11): 1865-1880.

Levin, A., Lin, C., Chu, C., 2002. Unit root tests in panel data: asymptotic and finite sample properties. Journal of Econometrics 108, pp1-24.

Lundvall, B.A., 1992. Introduction, National Systems of Innovation: towards a theory of innovation and interactive learning. Pinter.

Marinova, D., 2000. Eastern European patenting activity in the USA. Technovation 21, pp. 571-584.

Murrel, P., 1990. The Nature of Socialist Economies. Lessons from Eastern European Foreign Trade. Princeton University Press, Princeton, NJ.

Nelson, R., 1993. National Innovation Systems: a comparative analysis. Oxford University press.

Park, W., Wagh, S., 2002. Index of Patent Rights, in Economic Freedom of the World: 2002 Annual Report.

Porter, M., 1990. The Competitive Advantage of Nations, Free Press.

Radosevic, S., Auriol, L., 1999. Patterns of restructuring in research, development and innovation activities in central and eastern European countries: an analysis based on S&T indicators. Research Policy, Vol. 28, pp.351-376.

Radosevic, S., Kutlaca, D., 1999. Technological 'catching-up' potential of Central and Eastern Europe: an analysis based on US foreign patenting data. Technology Analysis and Strategic Management Vol.11, pp. 95-111.

Radosevic, S., 2004. A Two-Tier or Multi-Tier Europe? Assessing the Innovation Capacities of Central and East European Countries in the Enlarged EU. Journal of Common Market Studies, Blackwell Publishing, Vol. 42(3), pp. 641-666.

Raiser, M., Schaffer, M., Schuchhardt, J., 2004. Benchmarking structural change in transition. Structural Change and Economic Dynamics 15, pp 47-81.

Romer, P., 1990. Endogenous Technological Change. Journal of Political Economy, University of Chicago Press, vol. 98(5), pp. 71-102.

Srholec, M., 2007. A multilevel approach to geography of innovation, TIK Working Papers on Innovation Studies.

Smarzynska Javorcik, B., 2002. The Composition of Foreign Direct Investment and Protection of Intellectual Property Rights: Evidence from Transition Economies. European Economic Review, 2004, vol. 48, issue 1, pp. 39-62

Suarez-Villa, L., Hasnath, S.A., 1993. The effect of infrastructure on innovation: Innovative capacity and the dynamics of public construction investment. Technological Forecasting and Social Change 44, 333-358.

Szalavetz, A., 2006. From Industrial Capitalism to Intellectual Capitalism: The Bumpy Road to a Knowledge-based Economy in Hungary, in: Piech, K., Radosevic, S. (Eds.), The Knowledge-Based Economy in Central and East European Countries and Industries in a Process of Change, Palgrave Macmillan.

Varsakelis, N., 2006. Education, political institutions and innovative activity: A cross-country empirical investigation. Research Policy 35, pp.1083–1090.

Waguespack, D. M., Birnir, J. K., Scroeder, J., 2005. Technological development and political stability: Patenting in Latin America and the Caribbean. Research Policy 34, 1570-1590.

Wooldridge, J.F., 2002. Econometric Analysis of Cross-section and Panel-data. MIT Press, Cambridge, MA.