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Has Globalization Triggered Collective Impact of National Intelligence on Economic Growth?

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  • Burhan, Nik Ahmad Sufian
  • Sidek, Abdul Halim
  • Kurniawan, Yohan
  • Mohamad, Mohd Rosli

Abstract

Previous studies found that the impact of intelligence (IQ) on productivity is larger at country level than at individual level. Labor works in clusters at the country level, and therefore, the effect of individual skill complementarities collectively magnifies per capita income at the national level, which is consistent with the O-ring theory of economic development. The main feature of the O-ring theory is positive assortative matching, in which individuals can augment productivity per capita when they team up with other individuals with equivalent levels of skills. We investigated whether global integration would intensify this impact owing to global interconnectivity of skills and intellectual ideas. By extending the O-ring theory, we examined the role of economic globalization (i.e., actual flows and restrictions), social globalization (i.e., personal contact, information flows, and cultural proximity), and political globalization in moderating the impact of national IQ on the economic growth of more than 110 countries during 1970–2010. The results of our hierarchical multiple regressions suggest that IQ rather than economic, political, or social globalization has the strongest impact on economic growth. Moreover, moderation analysis revealed that globalization has reduced the impact of national IQ on economic growth at the cross-country level. We suggest that within the context of globalization, friction was present in the matching market and cognitive skill-sorting inefficiencies, which reduced the collective impact of IQ on economic growth.

Suggested Citation

  • Burhan, Nik Ahmad Sufian & Sidek, Abdul Halim & Kurniawan, Yohan & Mohamad, Mohd Rosli, 2014. "Has Globalization Triggered Collective Impact of National Intelligence on Economic Growth?," MPRA Paper 77316, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77316
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    Cited by:

    1. Burhan, Nik Ahmad Sufian & Che Razak, Razli & Salleh, Fauzilah & Labastida Tovar, María Elena, 2017. "Intelligence and the Ease of Doing Business: Does Intellectual Class Facilitate Leadership and Entrepreneurship?," MPRA Paper 77503, University Library of Munich, Germany.
    2. Antonio Rodríguez Andrés & Raufhon Salahodjaev, 2016. "Do cognitive able societies nurture entrepreneurs?," Economics Bulletin, AccessEcon, vol. 36(3), pages 1453-1462.
    3. Salahodjaev, Raufhon & Azam, Sardor, 2015. "Intelligence and gender (in)equality: empirical evidence from developing countries," MPRA Paper 66295, University Library of Munich, Germany.
    4. Azam, Sardor, 2017. "A cross-country empirical test of cognitive abilities and innovation nexus," International Journal of Educational Development, Elsevier, vol. 53(C), pages 128-136.
    5. Burhan, Nik Ahmad Sufian & Che Razak, Razli & Rosli, Muhamad Ridhwan & Selamat, Muhamad Rosli, 2017. "The Bell Curve of Intelligence, Economic Growth and Technological Achievement: How Robust is the Cross-Country Evidence?," MPRA Paper 77469, University Library of Munich, Germany.
    6. Svetlana S. Morkovina & Alexandr S. Natsubidze & Margarita S. Irizepova & Nikolai G. Sinyavsky & Vladimir V. Chashchin, 2016. "Transnational Business as a Manifestation of the Integration of the Global Economy and a Driving Force of its Development," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 10(4), December.
    7. Burhan, Nik Ahmad Sufian & Md. Yunus, Melor & Tovar, María Elena Labastida & Burhan, Nik Mohd Ghazi, 2016. "Why are cognitive abilities of children so different across countries? The link between major socioeconomic factors and PISA test scores," MPRA Paper 77239, University Library of Munich, Germany.

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    More about this item

    Keywords

    national IQ; collective IQ; economic growth; globalization; positive assortative matching.;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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