The impact of innovation investment on regional economic development: A comprehensive applied study of Arab regions (2015-2023)
Keywords:
innovation, regional development, R&D investment, spatial econometrics, Arab regions, panel data analysisAbstract
This study examines the relationship between innovation investment and regional economic development through a comprehensive applied analysis of ten Arab regions during the period 2015-2023. Utilizing panel data methodology and advanced spatial econometric modeling, the study analyzes 90 observations to investigate causal relationships and spatial spillover effects. Results reveal a strong positive relationship between R&D investment and regional economic growth (R² = 0.847), with statistically significant spatial spillover effects (ρ = 0.267). The findings suggest that a 1% increase in R&D intensity leads to a 1.85 percentage point increase in economic growth rate. The study recommends increasing R&D investment to 2.5% of regional GDP to achieve sustainable economic growth and emphasizes the importance of regional cooperation in innovation systems.
Downloads
References
Audretsch, D. B., & Feldman, M. P. (1996). R&D spillovers and the geography of innovation and production. American Economic Review, 86(3), 630-640.
Coe, D. T., & Helpman, E. (1995). International R&D spillovers. European Economic Review, 39(5), 859-887.
Cooke, P. (1992). Regional innovation systems: Competitive regulation in the new Europe. Geoforum, 23(3), 365-382.
Etzkowitz, H., & Leydesdorff, L. (2000). The dynamics of innovation: From national systems and 'Mode 2' to a triple helix of university-industry-government relations. Research Policy, 29(2), 109-123.
Griffith, R., Redding, S., & Van Reenen, J. (2004). Mapping the two faces of R&D: Productivity growth in a panel of OECD industries. Review of Economics and Statistics, 86(4), 883-895.
Jaffe, A. B. (1989). Real effects of academic research. American Economic Review, 79(5), 957-970.
Liu, Y., Chen, M., & Zhang, Q. (2023). Spatial spillover effects of innovation on regional economic growth: Evidence from Chinese regions. Regional Studies, 57(4), 167-189.
Lucas, R. E. (1988). On the mechanics of economic development. Journal of Monetary Economics, 22(1), 3-42.
Peri, G. (2005). Determinants of knowledge flows and their effect on innovation. Review of Economics and Statistics, 87(2), 739-767.
Rodríguez-Pose, A., & Crescenzi, R. (2008). Research and development, spillovers, innovation systems, and the genesis of regional growth in Europe. Regional Studies, 42(1), 51-67.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), S71-S102.
World Intellectual Property Organization. (2023). Global Innovation Index 2023: Innovation in the face of uncertainty. Geneva: WIPO Press.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 The International tax journal
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
