IDEAS home Printed from https://ideas.repec.org/a/ora/journl/v1y2011i1p72-79.html
   My bibliography  Save this article

Innovation Versus Income Convergence In Central And Eastern Europe. Is There A Correlation?

Author

Listed:
  • Jude Cristina

    (Universitatea Babes Bolyai, Stiinte Economice si Gestiunea Afacerilor)

  • Pop Silaghi Monica

    (Universitatea Babes Bolyai, Stiinte Economice si Gestiunea Afacerilor)

Abstract

The heterogeneity of response of the different economies facing the world economic crisis has brought into attention once again the issue of convergence inside the European Union. The high growth rates experienced by CEEC during the last decade created an optimistic view of rapid convergence towards Western Europe. But the crisis showed that the sources of economic growth in the region were not appropriate for a long run growth. Innovation is a key source of competitiveness and a contributor to a sustainable growth path. Even though CEEC lag behind other European countries in terms of R&D investment, a certain progress can be observed. The objective of the present paper is to establish if there is a correlation between the convergence in terms of GDP and the convergence in terms of innovation for the CEEC. Based on yearly Eurostat data for the period 1998-2008, we quantify the progress of each of the 10 CEEC both in closing the income gap and the innovation gap. We then rank the countries according to their speed of convergence and perform a Spearman rank correlation analysis. The results show that, on average, convergence in R&D is not correlated with convergence in GDP. The Czech Republic is the only country with a positive correlation between R&D intensity and GDP growth. Bulgaria, Hungary and Slovakia show a negative relationship between investment in R&D and economic growth. This implies that for most of the countries in Central and Eastern Europe, economic growth during the period 1998-2008 was mostly driven by non-innovation factors.

Suggested Citation

  • Jude Cristina & Pop Silaghi Monica, 2011. "Innovation Versus Income Convergence In Central And Eastern Europe. Is There A Correlation?," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 72-79, July.
    • Handle: RePEc:ora:journl:v:1:y:2011:i:1:p:72-79
    as

    Download full text from publisher

    File URL: http://anale.steconomiceuoradea.ro/volume/2011/n1/073.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    2. repec:dgr:rugggd:200469 is not listed on IDEAS
    3. Pradeep Mitra, 2008. "Innovation, Inclusion, and Integration : From Transition to Convergence in Eastern Europe and the Former Soviet Union," World Bank Publications - Books, The World Bank Group, number 6475.
    4. Bart van Ark & Marcin Piatkowski, 2004. "Productivity, innovation and ICT in Old and New Europe," International Economics and Economic Policy, Springer, vol. 1(2), pages 215-246, January.
    5. Aghion, Philippe & Howitt, Peter, 2005. "Growth with Quality-Improving Innovations: An Integrated Framework," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 2, pages 67-110, Elsevier.
    6. Oleh Havrylyshyn, 2001. "Recovery and Growth in Transition: A Decade of Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 48(4), pages 1-4.
    7. Bruno Pottelsberghe de la Potterie, 2008. "Europe's R&D: Missing the Wrong Targets?," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 43(4), pages 220-225, July.
    8. Slavo Radosevic, 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, Wiley Blackwell, vol. 42(3), pages 641-666, September.
    9. Verspagen, B., 2000. "Economic growth and technological change: an evolutionary interpretation," Working Papers 00.12, Eindhoven Center for Innovation Studies.
    10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    11. Narula, Rajneesh, 2009. "Attracting and embedding R&D by multinational firms: policy recommendations for EU new member states," MERIT Working Papers 2009-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Popovici (Barbulescu) Adina, 2012. "Considerations Regarding Romanian Higher Education Graduates," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 377-383, July.
    2. Adina Popovici (Bărbulescu), 2011. "Human Capital and Higher Education in Romania in the Last Years," Annals of the University of Petrosani, Economics, University of Petrosani, Romania, vol. 11(1), pages 207-214.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pop Silaghi, Monica Ioana & Alexa, Diana & Jude, Cristina & Litan, Cristian, 2014. "Do business and public sector research and development expenditures contribute to economic growth in Central and Eastern European Countries? A dynamic panel estimation," Economic Modelling, Elsevier, vol. 36(C), pages 108-119.
    2. Hübler, Michael, 2009. "Avoiding the trap: the dynamic interaction of North-South capital mobility and technology diffusion," Kiel Working Papers 1477, Kiel Institute for the World Economy (IfW Kiel).
    3. Kravtsova, Victoria & Radosevic, Slavo, 2012. "Are systems of innovation in Eastern Europe efficient?," Economic Systems, Elsevier, vol. 36(1), pages 109-126.
    4. Azomahou, Theophile & Diene, Bity & Diene, Mbaye, 2012. "Nonlinearities in productivity growth: A semi-parametric panel analysis," MERIT Working Papers 2012-046, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Krammer, Sorin M.S., 2009. "Drivers of national innovation in transition: Evidence from a panel of Eastern European countries," Research Policy, Elsevier, vol. 38(5), pages 845-860, June.
    6. Azomahou, Théophile T. & Diene, Bity & Diene, Mbaye, 2013. "Nonlinearities in productivity growth: A semi-parametric panel analysis," Structural Change and Economic Dynamics, Elsevier, vol. 24(C), pages 45-75.
    7. Richard Harris & John Moffat, 2011. "R&D, Innovation and Exporting," SERC Discussion Papers 0073, Centre for Economic Performance, LSE.
    8. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March.
    9. Volker Grossmann & Thomas M. Steger & Timo Trimborn, 2016. "Quantifying Optimal Growth Policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 18(3), pages 451-485, June.
    10. repec:use:tkiwps:3232 is not listed on IDEAS
    11. Arjan Lejour & Vladimir Solanic & Paul Tang, 2009. "EU Accession and Income Growth: An Empirical Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 127-144, May.
    12. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
    13. Dominique Guellec & Bruno Van Pottelsberghe de la Potterie, 2004. "From R&D to Productivity Growth: Do the Institutional Settings and the Source of Funds of R&D Matter?," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 66(3), pages 353-378, July.
    14. Wang, Lan-Hsun & Liao, Shu-Yi & Huang, Mao-Lung, 2022. "The growth effects of knowledge-based technological change on Taiwan’s industry: A comparison of R&D and education level," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 525-545.
    15. Guido Ascari & Valeria di Cosmo, 2005. "Determinants of total factor productivity in the italian Regions," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2005(2).
    16. Rachel Griffith & Stephen Redding & Helen Simpson, 2004. "Foreign Ownership and Productivity: New Evidence from the Service Sector and the R&D Lab," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(3), pages 440-456, Autumn.
    17. Ugur, Mehmet & Trushin, Eshref, 2018. "Asymmetric information and heterogeneous effects of R&D subsidies: evidence on R&D investment and employment of R&D personel," Greenwich Papers in Political Economy 21943, University of Greenwich, Greenwich Political Economy Research Centre.
    18. Pierluigi Murro, 2013. "The Determinants Of Innovation: What Is The Role Of Risk?," Manchester School, University of Manchester, vol. 81(3), pages 293-323, June.
    19. Szalavetz, Andrea, 2011. "Innovációvezérelt növekedés? [Innovation-driven growth?]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(5), pages 460-476.
    20. Drees, Burkhard & Eckwert, Bernhard, 2010. "Implications of more precise information for technological development and economic welfare," Journal of Economic Dynamics and Control, Elsevier, vol. 34(2), pages 266-279, February.
    21. Katherine Wynn & Mingji Liu & Jasmine Cohen, 2022. "Quantifying the economy‐wide returns to innovation for Australia," Australian Economic Papers, Wiley Blackwell, vol. 61(3), pages 591-614, September.

    More about this item

    Keywords

    convergence; growth; innovation; R&D;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ora:journl:v:1:y:2011:i:1:p:72-79. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catalin ZMOLE The email address of this maintainer does not seem to be valid anymore. Please ask Catalin ZMOLE to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/feoraro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.