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How institutional quality and economic factors impact technological deepening in developing countries

  • George R. G. Clarke

    (Development Research Group, The World Bank, Washington DC, USA)

This paper assesses the effect of institutional and economic factors on research and development (R&D) expenditures in developing countries. The paper finds that several measures of institutional quality are correlated with R&D expenditures. Since the institutional variables increase as institutional quality improves, this suggests that stronger institutions and better protection of property rights encourage greater R&D expenditures. In addition, foreign direct investment is negatively correlated within R&D expenditures, while defense expenditures are positively correlated with R&D expenditures in some model specifications. Although R&D is not the primary way that developing countries gain access to technology, these results are of interest since R&D might encourage technological deepening better than other methods that developing countries use to gain access to technology (e.g., through FDI or capital goods imports). Copyright © 2001 John Wiley & Sons, Ltd.

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Article provided by John Wiley & Sons, Ltd. in its journal Journal of International Development.

Volume (Year): 13 (2001)
Issue (Month): 8 ()
Pages: 1097-1118

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Handle: RePEc:wly:jintdv:v:13:y:2001:i:8:p:1097-1118
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