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Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis

Misbah Habib (Department of Business Administration, Forman Christian College, Lahore, Pakistan)
Jawad Abbas (Faculty of Economics and Administrative Sciences, Near East University , Nicosia, Cyprus)
Rahat Noman (Department of Business Administration, University of the Punjab , Lahore, Pakistan)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 26 February 2019

Issue publication date: 20 June 2019

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762

Abstract

Purpose

The purpose of this paper is to investigate the impact of human capital (HC), intellectual property rights (IPRs) and research and development (R&D) expenditures on total factor productivity (TFP), which leads to economic growth.

Design/methodology/approach

The panel data technique is used on a sample of 16 countries categorized into two groups, namely Brazil, Russia, India and China (BRIC) and Central and Eastern European (CEE) countries and, in order to make a comparison for the time period of 2007–2015, the researchers used a fixed effect model as an estimation method for regression.

Findings

The results indicate that HC, IPRs and R&D expenditures appear to be statistically significant and are strong factors in determining changes in TFP and exhibit positive results in all sample sets. Moreover, IPRs alone do not accelerate growth in an economy, especially taking the case of emerging nations.

Originality/value

Considering the importance of CEE and BRIC countries, and inadequate research on these regions with respect to current study’s variables and techniques, the present research provides valuable insights about the importance of HC, IPR and R&D activities and their impact on TFP, which leads to economic growth. IPRs create a fertile environment for R&D activities, knowledge creation and economic development. Distinct nations can attain better economic status via HC, R&D activities, innovation, trade and FDI, although the relative significance of these channels is likely to differ across countries depending on their developmental levels.

Keywords

Citation

Habib, M., Abbas, J. and Noman, R. (2019), "Are human capital, intellectual property rights, and research and development expenditures really important for total factor productivity? An empirical analysis", International Journal of Social Economics, Vol. 46 No. 6, pp. 756-774. https://doi.org/10.1108/IJSE-09-2018-0472

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited