Dynamics of R&D Efforts, Patents, Exports and Economic Growth by World Trade Region, 1990-2021

This paper has two objectives. First, to compare the dynamics of R&D/GDP (%), resident patent applications, high-tech exports -VATX- (%), and the innovation and economic growth patterns of countries in North America, the European Union and Asia between 1997 and 2021. Second, to estimate the impact of R&D/GDP and resident and non-resident patent applications on VATX for each selected country through an ARDL model in the period 1997-2016. Results show that countries with more resident patent applications have more VATX. Overall, the effect of the number of resident patent applications and R&D expenditure on VATX depends on the dynamics in each country. Thus, in the United States, Germany, Japan, and China, the effect of the R&D, the number of resident and non- resident patents applied for, on the tendency to VATX is positive, while in the rest of the economies, the results are mixed. Comparing the dynamics of innovation and economic growth between the “old” and “new” members of the European Union, we find evidence of differentiated patterns, with the “old” members’ economic growth is particularly linked to the sustainability of innovative activity, supported by continuous R&D efforts, while among the new members some are beginning to build the virtuous circles that will lead them to sustainable economic growth. The differences are also evident among the USMCA countries, where the United States is the leader and Mexico has dispersion and erratic growth rates, showing that economic growth is not significantly related to innovation. In contrast, in the Southeast Asian region, the dynamics of innovation and GDP grow in a sustained and articulated manner over time.