Industrial Network Concentration and Innovation

National innovation capacity is vital for long-term sustainable development. While prior research has emphasized the role of innovation infrastructure, the impact of industrial structure remains underexplored. This study introduces novel national-level indicators of industrial network concentration using global input-output data, combined with patent data from nine countries (G7, China, and South Korea) over 1995–2020. We find that higher industrial network concentration is associated with a statistically and economically significant increase in innovation capacity, after controlling for a comprehensive set of standard covariates. In addition, trade openness, urbanization, and education significantly and negatively moderate this relationship.