INNOVATION, CORRUPTION, AND ECONOMIC GROWTH IN EMERGING ASIA
Abstract
In this paper, we investigate the impact of innovation and corruption on economic growth for 13 emerging Asian economies over the period of 2009 to 2018. Using global innovation and corruption indices, we show that innovation has no significant impact on growth. In contrast, corruption slows down growth in the region. Our results indicate that innovation in the region is not robust enough to attract growth and that corruption is the major hindrance to growth.
Downloads
References
Acemoglu, D., & Verdier, T. (2000). The Choice Between Market Failures and Corruption. American economic review, 90, 194-211.
Andergassen, R., Nardini, F., & Ricottilli, M. (2009). Innovation and Growth Through Local and Global Interaction. Journal of Economic Dynamics and Control, 33, 1779-1795.
Andergassen, R., Nardini, F., & Ricottilli, M. (2009). Innovation and Growth Through Local and Global Interaction. Journal of Economic Dynamics and Control, 33, 1779-1795.
Asiedu, E., & Freeman, J. (2009). The Effect Of Corruption On Investment Growth: Evidence from Firms in Latin America, Sub‐Saharan Africa, and Transition Countries. Review of Development Economics, 13, 200-214.
Bae, S. H., & Yoo, K. (2015). Economic Modeling of Innovation in the Creative Industries and its Implications. Technological Forecasting and Social Change, 96, 101-110.
Brockman, P., Khurana, I. K., & Zhong, R. I. (2018). Societal Trust and Open Innovation. Research Policy, 47, 2048-2065.
Blackburn, K., & Powell, J. (2011). Corruption, Inflation and Growth. Economics Letters, 113, 225-227.
Campos, N. F., Dimova, R. D., & Saleh, A. (2010). Whither Corruption? A Quantitative Survey of the Literature on Corruption and Growth.
Cooray, A., Dzhumashev, R., & Schneider, F. (2017). How Does Corruption Affect Public Debt? An Empirical Analysis. World Development, 90, 115-127.
Devpura, N., & Narayan, P.K., (2020) Hourly Oil Price Volatility: The Role of COVID-19, Energy Research Letters, 1, 13683. https://doi.org/10.46557/001c.13683
Dincer, O. (2019). Does Corruption Slow Down Innovation? Evidence from a Cointegrated Panel of US States. European Journal of Political Economy, 56, 1-10.
Doh, S., & Acs, Z. J. (2010). Innovation and Social Capital: A Cross-Country Investigation. Industry and Innovation, 17, 241-262.
Domar, E. D. (1946). Capital Expansion, Rate of Growth, and Employment. Econometrica, Journal of the Econometric Society, 137-147.
Dreher, A., & Gassebner, M. (2007). Greasing the Wheels of Entrepreneurship. The Impact of Regulations and Corruption on Firm Entry (Working Paper, 2013). CESifo.
Ertugrul, H.M., Gungor, B.O., & Soytas, U. (2020). Effect of COVID-19 Outbreak on Turkish Diesel Consumption Volatility Dynamics. Energy Research Letters,1(3). https://doi.org/10.46557/001c.17496
Goedhuys, M., & Sleuwaegen, L. (2016). International Standards Certification, Institutional Voids and Exports from Developing Country Firms. International Business Review, 25, 1344-1355.
Grossman, G. M., & Helpman, E. (1990). Trade, Innovation, and Growth (No. 2123- 2018-4877).
Gyimah-Brempong, K. (2002). Corruption, Economic Growth, and Income Inequality in Africa. Economics of Governance, 3, 183-209.
Habibov, N., Barrett, B. J., & Chernyak, E. (2017). Understanding Women’s Empowerment and Its Determinants in Post-Communist Countries: Results of Azerbaijan National Survey. Women’s Studies International Forum, 62, 125–135.
Haroon, O., & Rizvi, S.A.R. (2020) Flatten the Curve and Stock Market Liquidity—An Inquiry into Emerging Economies. Emerging Markets Finance and Trade, 56, 2151-2161. https://doi.org/10.1080/1540496X.2020.1784716.
Harrod, R. F. (1939). An Essay in Dynamic Theory. The Economic Journal, 49, 14-33. Ho, S. Y., & Iyke, B. N. (2018). Finance-Growth-Poverty Nexus: A Re-Assessment of the Trickle-Down Hypothesis in China. Economic Change and Restructuring, 51, 221-247.
Ho, S. Y., & Iyke, B. N. (2020). The Determinants of Economic Growth in Ghana: New Empirical Evidence. Global Business Review, 21, 626-644.
Hsu, P. H., Tian, X., & Xu, Y. (2014). Financial Development and Innovation: Cross- Country Evidence. Journal of Financial Economics, 112(1), 116-135.
Huang, Y. (2015) Arresting Corruption in China—Why China’s Form of Corruption Is So Unique? The Diplomat.
Huntington, S. (1968). Political Order In Changing Societies, 45. Index, G. I. (2018). Energizing the World with Innovation. https://www.globalinnovationindex. org/gii-2017-report.
Iyke, B. N. (2017). Does Trade Openness Matter for Economic Growth in the CEE countries?. Review of Economic Perspectives, 17, 3-24.
Iyke, B. N. (2018). The Real Effect of Currency Misalignment on Productivity Growth: Evidence from Middle-Income Economies. Empirical Economics, 55, 1637-1659.
Iyke, B. (2020a). COVID-19: The Reaction of US Oil and Gas Producers to the Pandemic. Energy Research Letters, 1, 13912. https://doi.org/10.46557/001c.13912
Iyke, B.N. (2020b). The Disease Outbreak Channel of Exchange Rate Return Predictability: Evidence from COVID-19. Emerging Markets Finance and Trade, 56, 2277-2297. https://doi.org/10.1080/1540496X.2020.1784718
Iyke, B. N., & Ho, S. Y. (2020). Consumption and Exchange Rate Uncertainty: Evidence from Selected Asian countries. The World Economy, 43, 2437-2462.
Juhro, S. M., Narayan, P. K., Iyke, B. N., & Trisnanto, B. (2020). Is There A Role For Islamic Finance and R&D in Endogenous Growth Models in the Case of Indonesia?. Pacific-Basin Finance Journal. https://doi.org/10.1016/j. pacfin.2020.101297.
Klitgaard, Robert E. (1988). Controlling Corruption. Univ. of California Press.
Koenker, R., & Bassett Jr, G. (1978). Regression Quantiles. Econometrica: journal of the Econometric Society, 33-50.
Lee, Y., & Gordon, R. H. (2005). Tax structure and economic growth. Journal of public economics, 89, 1027-1043.
Leff, N. H. (1964). Economic Development through Bureaucratic Corruption. American Behavioral Scientist, 8, 8-14.
Lien, D. H. D. (1986). A Note on Competitive Bribery Games. Economics Letters, 22, 337-341.
Lui, F. T. (1985). An Equilibrium Queuing Model of Bribery. Journal of Political Economy, 93, 760-781.
Luo, Y. (2005). An Organizational Perspective of Corruption. Management and Organization Review, 1, 119-154.
Mansfield, E. (1972). Research and innovation in the modern corporation. Springer.
Maradana, R. P., Pradhan, R. P., Dash, S., Gaurav, K., Jayakumar, M., & Chatterjee, D. (2017). Does Innovation Promote Economic Growth? Evidence from European countries. Journal of Innovation and Entrepreneurship, 6, 1.
Mauro, P. (1995). Corruption and Growth. The Quarterly Journal of Economics, 110, 681-712.
Méndez, F., & Sepúlveda, F. (2006). Corruption, Growth and Political Regimes: Cross Country Evidence. European Journal of political economy, 22, 82-98.
Mishra, A.K., Rath, B.N., & Dash, A.K. (2020). Does the Indian financial Market Nosedive because of the COVID-19 Outbreak, in Comparison to after Demonetisation and the GST? Emerging Markets Finance and Trade, 56, 2162- 2180. https://doi.org/10/1080/1540496X.2020.1785425.
Murphy, Kevin M., Shleifer, Andrei, & Vishny, Robert W. (1993). Why is Rent-Seeking So Costly to Growth? American Economic Review, 83, 409–414.
Nadiri, M. I. (1993). Innovations and technological spillovers (No. w4423). National Bureau of Economic Research.
Narayan, P. K. (2020a). Oil Price News and COVID-19—Is There Any Connection?. Energy Research Letters, 1, 13176. https://doi.org/10.46557/001c.13176.
Narayan, P. K. (2020b). Did Bubble Activity Intensify During COVID-19? Asian Economics Letters, 1(2). https://doi.org/10.46557/001c.17654.
Narayan, P. K. (2020c). Has COVID-19 Changed Exchange Rate Resistance to Shocks? Asian Economics Letters, 1. https://doi.org/10.46557/001c.17389
Narayan, P., & Smyth, R. (2005). Trade Liberalization and Economic Growth in Fiji. An Empirical Assessment Using the ARDL approach. Journal of the Asia Pacific Economy, 10, 96-115. https://doi.org/10.1080/1354786042000309099
North, D. (1993). Institutions and Economic Performance. Rationality, Institutions and Economic Methodology, 242-261.
Özşahin, Ş., & Üçler, G. (2017). The consequences of corruption on inflation in developing countries: Evidence from Panel Cointegration and Causality Tests. Economies, 5, 49.
Paul, B. P. (2010). Does Corruption Foster Growth in Bangladesh?. International Journal of Development Issues, 9, 246-262.
Paunov, C., & Rollo, V. (2016). Has the Internet fostered Inclusive Innovation in the Developing World? World Development, 78, 587-609.
Pece, A. M., Simona, O. E. O., & Salisteanu, F. (2015). Innovation and Economic Growth: An Empirical Analysis for CEE Countries. Procedia Economics and Finance, 26, 461-467.
Phan, D.H.B., & Narayan, P.K., (2020) Country Responses and the Reaction of the Stock Market to COVID-19—a Preliminary Exposition. Emerging Markets Finance and Trade, 56, 2138-2150. https://doi.org/10.1080/1540496X.2020.1784719
Pharr, Susan J., & Putnam, R, D. (2000). Disaffected Democracies: What’s Troubling the Trilateral Countries? Princeton University Press.
Prabheesh, K.P., Padhan, R., & Garg, B., (2020) COVID-19 and the Oil Price—Stock Market Nexus: Evidence from Net Oil-Importing Countries, Energy Research Letters, 1, 13745. https://doi.org/10.46557/001c.13745
Romer, P. M. (1994). The Origins of Endogenous Growth. Journal of Economic perspectives, 8, 3-22.
Salisu, A. A., & Sikiru, A. A. (2020). Pandemics and the Asia-Pacific Islamic stocks. Asian Economics Letters, 1. https://doi.org/10.46557/001c.17413.
Schumpeter, J. A. (1912). The Theory of Economic Development.
Sha, Y., and Sharma, S.S. (2020). Research on Pandemics. Special Issue of the Journal Emerging Markets Finance and Trade, 56, 2133-2137. https://doi.org/10.1080/1540496X.2020.1795467
Solow, R. M. (1956). A Contribution to the Theory of Economic Growth. The Quarterly Journal of Economics, 70, 65-94.
Takumah, W., & Iyke, B. N. (2017). The Links Between Economic Growth and Tax Revenue in Ghana: an empirical investigation. International Journal of Sustainable Economy, 9, 34-55.
Tanzi, V. (1998). Corruption around the World: Causes, Consequences, Scope, and Cures. IMF Staff Papers, 45, 559-594.
Teorell, J. (2007). Corruption as an Institution: Rethinking The Nature and Origins of the Grabbing Hand. QoG Working Paper Series, 5, 1-24.
Uddin, M. A., Ali, M. H., & Masih, M. (2017). Political Stability And Growth: An Application Of Dynamic GMM and Quantile Regression. Economic Modelling, 64, 610-625.
Uzawa, H. (1964). Optimal growth in A Two-Sector Model of Capital Accumulation. The Review of Economic Studies, 31, 1-24.
Wei, S. J. (2000). How Taxing Is Corruption on International Investors? Review of Economics and Statistics, 82, 1-11.
Wright, A. S., & Craigwell, R. (2012). Economic Growth and Corruption in Developing Economies: Evidence from Linear and Non-Linear Panel Causality Tests. Journal of Business, Finance and Economics in Emerging Economies, 8, 23-43.
Zhu, H., & Zhu, S. X. (2017). Corporate Innovation and Economic Freedom: Cross- Country Comparisons. The Quarterly Review of Economics and Finance, 63, 50-65.
Copyright (c) 2020 Buletin Ekonomi Moneter dan Perbankan
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Buletin Ekonomi Moneter dan Perbankan / Bulletin of Monetary Economics and Banking is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
