The Role of Innovation in Changing the Path of Economic Catch-Up after the COVID 19 Pandemic

Document Type : Research Paper

Author

Associated Professor of Economics, Department of Management and Economics, Faculty of Humanities and Social Sciences, Golestan University, Gorgan, Iran.

Abstract

abstract: The catch-up effect refers to a theory that holds that the per capita incomes of emerging and developing nations will eventually converge with the per capita incomes of more developed, wealthier countries. This study employs the economic catch-up index to answer two key questions: First, has the COVID-19 shock altered the trajectory of global economic catch-up? Second, if such a shift has occurred, has the quality of innovation within countries contributed to better performance and facilitated catch-up during the pandemic compared to the pre-pandemic period? To address these questions, the catch-up index was estimated for 194 countries across both pre- and post-pandemic periods. Using a mean comparison test, the economic catch-up index before and after the pandemic was compared, categorizing countries into three groups based on their performance: (1) Worse than before, (2) No change, and (3) Better than before. Finally, generalized ordered logit regression models were applied to examine whether the quality of innovation improved the catch-up trajectories. The results indicate that innovation plays a crucial role in enhancing countries' economic performance post-pandemic. Specifically, an increase in the innovation index reduces the likelihood of experiencing diminished economic catch-up following the pandemic shock by 0.011 to 0.027 units. Furthermore, countries with higher levels of innovation were 0.003 to 0.013 units more likely to be classified in the group with improved catch-up performance. Notably, the impact of innovation on recovery was more pronounced among lower-middle-income countries, suggesting that innovation serves as a stronger catalyst for economic catch-up in these economies.

Keywords

References

منابع
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Innovation EconomicEcosystem Studies
Volume 4, Issue 3
December 2024
Pages 1-18

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