Configuration of National Innovation Systems and their Effects on Economic Growth

Abstract

This paper quantitatively analyses the contribution of innovation to economic growth and the effect of the different configurations of National Innovation Systems on European economies. It starts from the neoclassical framework of economic growth, revitalized by Mankiw et al. in 1992, and supplements it with new theories of technological change and the economy of innovation, in particular the contribution of the Innovation Systems Theory. In the empirical estimation, the article applies the estimator “Pooled Mean Group” for dynamic panel data on a sample of 23 European countries in the period 1995-2012, confirming the hypothesis on the positive impact of innovation –measured by a National Innovation Index– on the rate of the countries’ economic growth. These pages also demonstrate that different configurations of NSI’s have different effects on the economic growth rates of European economies.