On the factors of innovation and economic growth
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One could hardly overstate the importance of economic growth and innovation as the engine of continuous improvement in the quality of life and wellbeing. This dissertation seeks to improve our understanding of factors impacting on economic growth and the process of innovating. Chapter 1 underscores that exploring the relationship between competition and innovation requires consistency in the way innovation is measured and proxied. It shows that a failure to do so can lead to conﬂicting conclusions on how competition aﬀects innovation. Chapter 2 explores the literature on the relationship between business cycles and innovation to argue that existing evidence is conﬂicting and implies that research and development (R&D) activities respond positively to downturns at the level of individual ﬁrms (i.e. are countercyclical) but negatively at that of sectors and economies (i.e. are procyclical). The chapter explains this regularity through the procyclicality of ﬂuctuations in the number of R&D performers, which oﬀsets the countercyclicality of individual R&D proﬁles and makes it look procyclical at the aggregate level. Chapter 3 documents and analyses the positive link between the strength of intersectoral connections within an economy, and its growth. To explain this regularity, it develops a tractable theoretical framework whereby tighter connections bring about stronger propagation downstream of productivity growth episodes in individual ﬁrms and sectors. Analysing the framework yields stark testable predictions on the most growth-enhancing structure of the intersectoral linkage.
Thesis, PhD Doctor of Philosophy
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