Knowledge Production and Economic Development: Empirical Evidences

This paper throws some light on the relationship between domestic knowledge production and economic development for a group of countries in different periods of time. In particular, this article presents a statistical analysis using the Qualitative Comparative Analysis (QCA) method and corroborates that there is a strong relationship between economic development and the domestic capacity to produce new knowledge. We use as a proxy for domestic knowledge production the patent application by residents and the metric of income level used was the GDP per capita. We show that an increase in the stock of knowledge produced by residents is an important policy to generate income in an economic system once residents are able to appropriate the gains for the use of this new knowledge. Accordingly, there is a dual effect: Knowledge stock growth has a positive impact on GDP, and GDP growth leads to increases in resources to be used for new knowledge generation. In times of global value chains and capital mobility, incentivizing creative imitation, absorption, and production of new knowledge seems to be a valid strategy for less industrialized countries.