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The relationship between the pillars of national innovation systems and economic complexity: An international empirical analysis

Author

Listed:
  • Breno Valente Fontes Araújo

    (Federal University of Viçosa - UFV, Business and Accounting Department
    Federal Institute of Minas Gerais - IFMG)

  • Ana Claudia Azevedo

    (Federal University of Viçosa - UFV, Business and Accounting Department)

  • Marco Aurélio Marques Ferreira

    (Federal University of Viçosa - UFV, Business and Accounting Department)

Abstract

Economic complexity reflects a country’s ability to diversify and produce knowledge-intensive goods, making it a key element in understanding development processes. Rooted in innovation dynamics, this study investigates the extent to which the pillars of national innovation systems (NIS), namely institutions, human capital and research, infrastructure, market sophistication, and business sophistication, influence the level of economic complexity across countries. Using data from 112 countries in 2020, drawn from the Global Innovation Index (GII) and the Economic Complexity Index (ECI), multiple linear regression models were estimated to assess the direct and interaction effects of these pillars. The results reveal that infrastructure and business sophistication have a significant and positive influence on economic complexity, while the other pillars do not exhibit direct effects. Additionally, a marginally significant interaction between infrastructure and human capital and research suggests that the effect of infrastructure is more pronounced in contexts where human capital is less developed. These findings reinforce the conditional and interdependent nature of innovation inputs and emphasize the importance of complementary investments across NIS pillars. The study contributes to the literature by bridging innovation and complexity frameworks. It provides practical insights for policymakers aiming to foster structural transformation and sustainable development through innovation-driven strategies.

Suggested Citation

  • Breno Valente Fontes Araújo & Ana Claudia Azevedo & Marco Aurélio Marques Ferreira, 2025. "The relationship between the pillars of national innovation systems and economic complexity: An international empirical analysis," Journal of Evolutionary Economics, Springer, vol. 35(5), pages 809-832, November.
    • Handle: RePEc:spr:joevec:v:35:y:2025:i:5:d:10.1007_s00191-025-00914-9
    DOI: 10.1007/s00191-025-00914-9
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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