Trends in innovation activities in manufacturing industries across development echelons


  • Abdullah M. Khan Claflin University



Innovation, manufacturing industries, patent applications, patent count.


This empirical paper explores trends in innovation activities measured by a countries’ total patent application submission intensity relative to its population, and by analyzing U.S. granted patents data for cohorts of developed countries and developing countries. In addition to tabular and graphical analyses, I use a baseline regression model and a variant model thereof to assess the relative influence of a set of aggregate variables on innovation activities in eight manufacturing industries across two cohorts of countries (developed and developing) where each cohort contains eight individual countries. Eight industries included in this study are: Chemical, Petroleum, electrical and electronics equipment, machinery, pharmaceutical, plastic, computer, and textile. The cohort of developed countries includes Australia, Canada, Czech Republic, France, Italy, Poland, Switzerland, and the United States. The cohort of developing countries includes Brazil, China, India, Malaysia, Mexico, Russia, South Africa, and Turkey. Per regression results, ethnic diversity is a statistically significant positive determinant of innovation for all industry aggregate patent count for both high income and developing countries. Also, per capita electricity usage, R&D expenditure as percent of GDP, and percent of population with internet access are three positive factors of innovation irrespective of industrial subsectors and position of a country in the development echelon. Interestingly, impact of ICT-services export is statistically significant and innovation boosting in developing countries in the cohort relative to countries in the cohort of developed countries. It also appears that trade openness served as a stronger stimulant of innovation activities for developing countries’ but not as much for the cohort of developed or high-income countries. This paper attempts to extend the literature on cross-country comparison of innovation activities by using two measures of innovation activities across developed and developing countries, and by analyzing both aggregate and sector-level data for eight manufacturing industries both graphically and utilizing panel regression models.  

Author Biography

Abdullah M. Khan, Claflin University

Assistant professor, School of Business


Almeida, R. K., & Fernandes, A. M. (2007). Openness and Technological Innovations in Developing Countries: Evidence from Firm-Level Surveys (No. 2907): IZA

Audretsch, D. B., & Feldman, M. P. (1996). R&D spillovers and the geography of innovation and production. The American economic review, 86(3), 630-640.

Bluestone, B. and A. Clayton-Matthews (2013). Life Sciences Innovation as a Catalyst for Economic Development: The Role of the Massachusetts Life Sciences Center. The Kitty and Michael Dukakis Center for Urban and Regional Policy, Boston, Massachusetts:1-60.

Bordo, M. D., Taylor, A. M., & Williamson, J. G. (2003). Globalization in Historical Perspectives. Paper presented at the Globalization in Historical Perspectives.

Chen, L., & De Lombaerde, P. (2014). Testing the relationships between globalization, regionalization and the regional hubness of the BRICs. Journal of Policy Modeling, 36, S111-S131.

Cohen, S. S., & Zysman, J. (1988). Manufacturing Innovation and American Industrial Competitiveness. Science, 239(4844), 1110-1115.

Colecchia, A., & Schreyer, P. (2002). ICT investment and economic growth in the 1990s: is the United States a unique case? a comparative study of nine OECD countries. Review of Economic Dynamics, 5(2), 408-442.

Council on Competitiveness (2005). Innovate America: National Innovation Initiative Summit and Report (pp. 1-93).

Deloitte LLP (2016). Global manufacturing competitiveness report, Council on Competitiveness, pp. 1-12.

Diez, F. J., & Gopinath, G. (2014). The competitiveness of U.S. manufacturing. Boston, MA: Federal Reserve Bank of Boston.

d'Agostino, G. and M. Scarlato (2015). "Innovation, Socio-institutional Conditions and Economic Growth in the Italian Regions." Regional Studies 49(9): 1514-1534.

Engel, J. S. (2015). Global Clusters of Innovation: Lessons from Silicon Valley. California Management Review, 57(2): 36-65.

Falk, M. (2004). What Determines Patents Per Capita in OECD Countries? Vienna Austrian Institute of Economic Research.

Frenkel, A., & Maital, S. (2014). Mapping National Innovation Ecosystems: Foundations for Policy Consensus: Edward Elgar Publishing.

Gobble, M. M. (2014). Charting the innovation ecosystem. Research-Technology Management, 57(4), 55-59.

Gordonichenko, Y., Svejnar, J., & Terrell, K. (2010). Globalization and Innovation in Emerging Markets. American Economic Journal: Macroeconomics, 2(2), 194-226.

Gorodnichenko, Yuriy, Jan Svejnar, and Katherine Terrell. (2008). Globalization and Innovation in Emerging Markets. NBER Working Paper No. 14481.

Grossman, G. M., & Helpman, E. (1993). Innovation and growth in the global economy: MIT press.

Green, W. (2008). Econometric Analysis (6th ed.). Upper Saddle River, N.J.: Prentice Hall.

Jackson, D. J. (2011). What is an innovation ecosystem? National Science Foundation, 1.

Jaffe, A. B., Trajtenberg, M., & Henderson, R. (1993). Geographic localization of knowledge spillovers as evidenced by patent citations. the Quarterly journal of Economics, 108(3), 577-598.

Jalava, J., & Pohjola, M. (2002). Economic growth in the new economy: Evidence from advanced economies. Information Economics and policy, 14(2), 189-210.

Khan, A. M., & Roy, P. A. (2011). Globalization and the Determinants of Innovation in BRICS versus OECD Economies: A Macroeconomic Study. Journal of Emerging Knowledge in Emerging Markets, 3, 29-45.

Kirimaya, N. (2012). Trade and Innovation Synthesis Report. OECD Trade Policy Papers no. 135. OECD

Lee, C. (2004). The Determinants of Innovation in the Malaysian Manufacturing Sector: An Econometric Analysis at the Firm Level. ASEAN Economic Bulletin, 21(3), 319-329.

Love, J. H., & Roper, S. (1999). The determinants of innovation: R & D, technology transfer and networking effects. Review of Industrial Organization, 15(1), 43-64.

Mankiw, N. G., Romer, D., & Weil, D. N. (1992). A contribution to the empirics of economic growth. the Quarterly journal of Economics, 107(2), 407-437.

Mas, M., & Quesada, J. (2005). ICT and Economic Growth.

Morck, R., & Yeung, B. (2001). The Economic Determinants of Innovation (No. 25): Industry Canada

Naude, W., Szirmai, A., & Goedhuys, M. (2011). Innovation and entrepreneurship in developing countries: United Nation's University.

NASSCOM. (2011). The IT-BOP Sector in India: Strategic Review

Nathan, M., & Lee, N. (2013). Cultural Diversity, Innovation, and Entrepreneurship: Firm‐level Evidence from London. Economic Geography, 89(4), 367-394.

Neill, J. O. (2007). BRICS and Beyond. New York: Goldman Sachs.

OECD (2007). Innovation and growth rationale for an innovation strategy, Paris: 1-29. (full text download link:

OECD. (2012). Innovation for Development.

OECD Trade database (2017). (data retrieved from MEI_TRD# )

Onodera, O. (2008). Trade and Innovation Project: A Synthesis Paper. Organization of Economic Cooperation and Development.

Ostergaard, C. R., & Timmermans, B. (2011). Does a different view create something new? The effect of employee diversity on innovation. Research Policy, 40(3), 500-509.

Ozgen, C., Nijkamp, P., & Poot, J. (2011). The impact of cultural diversity on innovation: evidence from Dutch firm-level data.

Paris: OECD. (full text download:

Parrotta, P., Pozzoli, D., & Pytlikova, M. (2014). The nexus between labor diversity and firm’s innovation. Journal of Population Economics, 27(2), 303-364.

Quatraro, F. (2010). Knowledge coherence, variety and economic growth: manufacturing evidence from Italian regions. Research Policy, 39(10), 1289-1302.

Rogers, M. (2004). Networks, Firm Size and Innovation. Small Business Economics, 22, pp. 141-153.

Romer, P. M. (1994). The origins of endogenous growth. The journal of economic perspectives, 8(1), 3-22.

Romer, P. M. (1990). Endogenous technological change. Journal of political Economy, 98(5, Part 2), S71-S102.

Romer, P. M. (1986). Increasing returns and long-run growth. Journal of political Economy, 94(5), 1002-1037.

Rosenberg, N. (2004). Innovation and economic growth. Paper presented at the Conference on Innovation and Growth in Tourism, Lugano, Switzerland.

Sala-i-Martin, X. (2002). 15 Years of New Growth Economics: What Have We Learnt? Department of Economics Discussion Paper No. 0103-47. Columbia University.

Schumpeter, J. A. (1942). Capitalism, Socialism and Democracy. New York: Harper.

Solow, R. M. (1957). Technical change and the aggregate production function. The review of Economics and Statistics, 312-320.

Solow, R. M. (1956). A contribution to the theory of economic growth. the Quarterly journal of Economics, 70(1), 65-94.

Statistics Canada report on Manufacturing. Data retrieved from the weblink:

ŞTefan, G. and O. Coca (2015). "Empirical evidences regarding the role of innovation in economic growth." Agronomy Series of Scientific Research / Lucrari Stiintifice Seria Agronomie 58(1): 195-198

Subrahmanya, M. H. B. (2011). Technological Innovations and Firm Performance of Manufacturing SMEs: Determinants and Outcomes. ASCI Journal of Management, 41(1),

Ulku, H. (2007). R&D, Innovation, and Growth: Evidence from Four Manufacturing Sectors in OECD Countries. Oxford Economic Papers, 59(3), new series, 513-535. Retrieved from

United States Census Bureau. County Business Pattern online database (cited data retrieved from following weblink:

United States International Trade Commission online database (cited data retrieved from following weblink: sector.htm).

Uppenberg, K. (2011). Innovation and Economic Growth. 14: 10-35.

Wu, Y. (2010). Indigenous innovation for sustainable growth. China: The Next Twenty Years of Reform and Development, ANU Press. 2010: 341-362.