Exploring Innovation Performance in OECD Countries: The Impact of Economic, Institutional, and Social Factors

Year 2025, Volume: 5 Issue: 1, 20 - 32, 30.06.2025

Reyyan Rabia Deniz

https://doi.org/10.61192/indpol.1684505

Abstract

This study examines the economic, institutional, and social factors influencing innovation performance in OECD countries, employing a Panel Quantile Regression model with a dataset covering 38 OECD countries from 2013 to 2023. Innovation is widely acknowledged as a key driver of economic growth and competitiveness, yet its determinants vary significantly across countries. The findings highlight that economic growth has a positive and significant impact on the global innovation index. Additionally, carbon emissions, green technology diffusion, and government stability are found to have positive and significant effects on innovation. In contrast, foreign direct investments and urban population density exert negative and significant influences on innovation. The study also reveals that variables such as foreign trade deficit, logistics performance, and income inequality do not show statistically significant effects on innovation. With a Pseudo R² value of 0.7169, the model explains 71.69% of the variation in the dependent variable. In conclusion, the study underscores the importance of addressing economic, social, and institutional factors in a comprehensive manner to enhance innovation performance. Specifically, boosting investments in green technology, fostering economic growth, and ensuring greater governmental stability can enhance innovation efficiency. Additionally, managing the negative effects of urban population growth on innovation highlights the necessity of innovative solutions for urbanization.

Keywords

Global Innovation , Socio-economic Factors , Panel Quantile Regression.

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