IDEAS home Printed from https://ideas.repec.org/p/hhs/lucirc/2015_033.html
   My bibliography  Save this paper

Global Dynamics, Capabilities and the Crisis

Author

Listed:
  • Fagerberg, Jan

    (IKE, University of Aalborg; TIK, University of Oslo; CIRCLE, Lund University)

  • Srholec, Martin

    (CIRCLE, Lund University and CERGE-EI, Charles University and Economics Institute of the Academy of Sciences of the Czech Republic)

Abstract

The financial crisis started in 2007-8, initially in the US, but its consequences have been felt throughout the global economy. However, its effects were far from uniform. While parts of Asia and Africa continued to grow fast, Europe experienced a large set back. This paper emphasizes three important factors: differences across countries in technological development; in capacities to exploit the opportunities offered by technology; and in the ability to compete in international market. A formal model, based on this approach, is developed and applied to data for 100 countries in the period 1997-2012. Empirical indicators reflecting the various factors are developed, a dataset constructed and econometric estimates of the model performed. The results are used to explore the factors behind the slowdown in economic growth, with a particular emphasis on the continuing stagnation in Europe, and discuss the implications for the future research in this area.

Suggested Citation

  • Fagerberg, Jan & Srholec, Martin, 2015. "Global Dynamics, Capabilities and the Crisis," Papers in Innovation Studies 2015/33, Lund University, CIRCLE - Centre for Innovation Research.
    • Handle: RePEc:hhs:lucirc:2015_033
    as

    Download full text from publisher

    File URL: http://wp.circle.lu.se/upload/CIRCLE/workingpapers/201533_Fagerberg_Srholec.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fagerberg, Jan & Srholec, Martin & Knell, Mark, 2007. "The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind," World Development, Elsevier, vol. 35(10), pages 1595-1620, October.
    2. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
    5. Zsolt Darvas, 2012. "Real effective exchange rates for 178 countries: A new database," CERS-IE WORKING PAPERS 1210, Institute of Economics, Centre for Economic and Regional Studies.
    6. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    7. Jean Arcand & Enrico Berkes & Ugo Panizza, 2015. "Too much finance?," Journal of Economic Growth, Springer, vol. 20(2), pages 105-148, June.
    8. Fagerberg, Jan, 1988. "International Competitiveness," Economic Journal, Royal Economic Society, vol. 98(391), pages 355-374, June.
    9. Stephen Cecchetti & Enisse Kharroubi, 2012. "Reassessing the impact of finance on growth," BIS Working Papers 381, Bank for International Settlements.
    10. Castellacci, Fulvio & Natera, Jose Miguel, 2011. "A new panel dataset for cross-country analyses of national systems, growth and development (CANA)," MPRA Paper 28376, University Library of Munich, Germany.
    11. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    12. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    13. Jeffrey D. Sachs, 2003. "Institutions Don't Rule: Direct Effects of Geography on Per Capita Income," NBER Working Papers 9490, National Bureau of Economic Research, Inc.
    14. Veblen, Thorstein, 1915. "Imperial Germany and The Industrial Revolution," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number veblen1915.
    15. Law, Siong Hook & Singh, Nirvikar, 2014. "Does too much finance harm economic growth?," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 36-44.
    16. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    17. Fagerberg, Jan & Laestadius, Staffan & Martin, Ben R. (ed.), 2015. "The Triple Challenge for Europe: Economic Development, Climate Change, and Governance," OUP Catalogue, Oxford University Press, number 9780198747413.
    18. Enrico Berkes & Ugo Panizza & Jean Louis Arcand, 2015. "Too Much Finance or Statistical Illusion: A Comment," IHEID Working Papers 12-2015, Economics Section, The Graduate Institute of International Studies.
    19. Fagerberg, Jan & Srholec, Martin, 2008. "National innovation systems, capabilities and economic development," Research Policy, Elsevier, vol. 37(9), pages 1417-1435, October.
    20. Cornwall, John, 1976. "Diffusion, Convergence and Kaldor's Laws," Economic Journal, Royal Economic Society, vol. 86(342), pages 307-314, June.
    21. World Bank, 2014. "World Development Indicators 2014," World Bank Publications - Books, The World Bank Group, number 18237.
    22. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    23. Easterly, William, 2001. "The Lost Decades: Developing Countries' Stagnation in Spite of Policy Reform 1980-1998," Journal of Economic Growth, Springer, vol. 6(2), pages 135-157, June.
    24. Fagerberg, Jan, 1988. "International Competitiveness: Errata," Economic Journal, Royal Economic Society, vol. 98(393), pages 1203-1203, December.
    25. World Bank, 2013. "World Development Indicators 2013," World Bank Publications - Books, The World Bank Group, number 13191.
    26. Fearon, James D, 2003. "Ethnic and Cultural Diversity by Country," Journal of Economic Growth, Springer, vol. 8(2), pages 195-222, June.
    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. Radosevic, Slavo & Meissner, Dirk & Lacasa, Iciar Dominguez & Günther, Jutta, 2019. "Exploring technology upgrading of emerging economies: From ‘shifting wealth I’ to ‘shifting wealth II’?," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 254-257.
    2. Katharina Friz & Jutta Günther, 2020. "Innovation and Economic Crisis in Transition Economies," Bremen Papers on Economics & Innovation 2014, University of Bremen, Faculty of Business Studies and Economics.
    3. Jutta Günther & Maria Kristalova & Udo Ludwig, 2019. "Structural stability of the research & development sector in European economies despite the economic crisis," Journal of Evolutionary Economics, Springer, vol. 29(5), pages 1415-1432, November.
    4. Maciej Grodzicki, 2018. "Prices of Value Added and Competitiveness in Global Value Chains," SPRU Working Paper Series 2018-14, SPRU - Science Policy Research Unit, University of Sussex Business School.
    5. Areti Gkypali & Kostas Kounetas & Kostas Tsekouras, 2019. "European countries’ competitiveness and productive performance evolution: unraveling the complexity in a heterogeneity context," Journal of Evolutionary Economics, Springer, vol. 29(2), pages 665-695, April.
    6. Katharina Friz & Jutta Günther, 2021. "Innovation and economic crisis in transition economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(4), pages 537-563, December.
    7. Spyros Arvanitis & Euripidis Loukis, 2024. "Factors Explaining Firm Economic Vulnerability During the 2008 Crisis," Journal of Industry, Competition and Trade, Springer, vol. 24(1), pages 1-41, December.
    8. Michalô °€ Brzozowski, 2020. "Impact of Credit Market Development and Stability on Productivity: New Evidence from the Industry Level," Annals of Economics and Finance, Society for AEF, vol. 21(1), pages 111-129, May.
    9. Jan Fagerberg & Martin Srholec, 2017. "Capabilities, economic development, sustainability," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 905-926.
    10. Michal Brzozowski, 2019. "Access to Credit and Growth of Firms," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 69(3), pages 253-274, June.

    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. Fagerberg , Jan & Srholec , Martin, 2015. "Capabilities, Competitiveness, Nations," Papers in Innovation Studies 2015/2, Lund University, CIRCLE - Centre for Innovation Research.
    2. Jan Fagerberg & Martin Srholec, 2017. "Capabilities, economic development, sustainability," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 905-926.
    3. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    4. Jan Fagerberg & Bengt-Åke Lundvall & Martin Srholec, 2018. "Global Value Chains, National Innovation Systems and Economic Development," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 533-556, July.
    5. Fagerberg, Jan & Srholec, Martin, 2008. "National innovation systems, capabilities and economic development," Research Policy, Elsevier, vol. 37(9), pages 1417-1435, October.
    6. Jan Fagerberg & Maryann Feldman & Martin Srholec, 2011. "Technological Dynamics and Social Capability: Comparing U.S. States and European Nations," Working Papers on Innovation Studies 20111114, Centre for Technology, Innovation and Culture, University of Oslo.
    7. Fagerberg, Jan & Srholec, Martin & Knell, Mark, 2007. "The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind," World Development, Elsevier, vol. 35(10), pages 1595-1620, October.
    8. Jan Fagerberg & Maryann P. Feldman & Martin Srholec, 2014. "Technological dynamics and social capability: US states and European nations," Journal of Economic Geography, Oxford University Press, vol. 14(2), pages 313-337.
    9. Jan Fagerberg & Martin Srholec, 2005. "Catching up: What are the Critical Factors for success?," Working Papers on Innovation Studies 20050401, Centre for Technology, Innovation and Culture, University of Oslo.
    10. Fulvio Castellacci, 2007. "Evolutionary And New Growth Theories. Are They Converging?," Journal of Economic Surveys, Wiley Blackwell, vol. 21(3), pages 585-627, July.
    11. Kemeny, Thomas, 2010. "Does Foreign Direct Investment Drive Technological Upgrading?," World Development, Elsevier, vol. 38(11), pages 1543-1554, November.
    12. Mugwagwa, Julius & Banda, Geoffrey & Ozor, Nicholas & Bolo, Maurice & Oriama, Ruth, 2022. "Optimising governance capabilities for science, research and innovation in Africa," Technology in Society, Elsevier, vol. 68(C).
    13. Jan Fagerberg, 2013. "Innovation - a New Guide," Working Papers on Innovation Studies 20131119, Centre for Technology, Innovation and Culture, University of Oslo.
    14. Giovanni Dosi & Andrea Roventini & Emmanuele Russo, 2020. "Public Policies And The Art Of Catching Up," Working Papers hal-03242369, HAL.
    15. Castellacci, Fulvio & Natera, Jose Miguel, 2013. "The dynamics of national innovation systems: A panel cointegration analysis of the coevolution between innovative capability and absorptive capacity," Research Policy, Elsevier, vol. 42(3), pages 579-594.
    16. Costantini, Valeria & Liberati, Paolo, 2014. "Technology transfer, institutions and development," Technological Forecasting and Social Change, Elsevier, vol. 88(C), pages 26-48.
    17. Jorge Nogueira de Paiva Britto & Leonardo Costa Ribeiro & Lucas Teixeira Araújo & Eduardo da Motta e Albuquerque, 2019. "Patent citations, knowledge flows and catching-up: evidences of different national experiences for the period 1982-2006," Textos para Discussão Cedeplar-UFMG 606, Cedeplar, Universidade Federal de Minas Gerais.
    18. Monika Kondratiuk-Nierodziñska, 2016. "New Knowledge Generation Capabilities And Economic Performance Of Polish Regions," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 11(3), pages 451-471, September.
    19. Eddy LEE & Marco VIVARELLI, 2006. "The social impact of globalization in the developing countries," International Labour Review, International Labour Organization, vol. 145(3), pages 167-184, September.
    20. Lavopa, A., 2014. "Catching up and lagging behind in a balance-of-payments-constrained dual economy," MERIT Working Papers 2014-042, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Technological capabilities; social capabilities; competitiveness; economic growth; crisis;
    All these keywords.

    JEL classification:

    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:hhs:lucirc:2015_033. 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: Torben Schubert (email available below). General contact details of provider: https://edirc.repec.org/data/circlse.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.