Very Relevant Evidences From System GMااM Estimates

International Economics 157 (2019) 134–169
Contents lists available at ScienceDirect
International Economics
journal homepage: www.elsevier.com/locate/inteco
Do economic openness and institutional quality influence patents?

Evidence from GMM systems estimates
Nguyen Phuc Canh a, Christophe Schinckus b, *, Su Dinh Thanh c
a
School of Banking, University of Economics Ho Chi Minh City, Viet Nam
b
Department of Economics and Finance, RMIT Vietnam, Viet Nam
c
School of Public Finance, University of Economics Ho Chi Minh City, Viet Nam
A R T I C L E I N F O A B S T R A C T
JEL classification: By using GMM estimators for unbalanced panel data, we examine the effects of institutional
O3 quality, trade openness, and FDI flows on innovation in 84 countries for the period between 1996
O38 and 2014. Our results show that, although institutional quality appears as a vital driver for patent
O4
applications, FDI flows and trade openness have different influences. Precisely, higher inward FDI
F43
flows have a positive effect on the number of patents whereas trade openness might have a
Keywords:
negative one. We afterwards discuss the influence of institutional quality on these two effects by
Patents
showing that the effects of economic openness are enhanced by the improvement of institutional
Institutional quality
Economic openness quality. These results are important for policy makers in setting-up the short-run and long-run
Economic development policies to sustain economic growth.
1. Introduction
By using GMM estimators for unbalanced panel data, this study aims at identifying the potential drivers of patent applications in
relation to the role of institutions and the economic openness (proxied by trade openness and FDI) in 84 countries (between 1996 and
2014 period). Our results show that, although the institutional quality is a vital driver for patent applications, the FDI flow and trade
openness have different influences. Precisely, higher inward FDI flows have a positive effect on the number of patents while the trade
openness might have a negative one. The contribution of this article is to measure and discuss the influence of institutional quality on
these two effects by showing that the effects of economic openness are exacerbated by the improvement of institutional quality.
The mechanism of economic growth is a complex issue for economists who generally acknowledge that innovation is a vital factor in
this process. This article studies the determinant of innovation by analyzing the potential relationship between the latter and economic
openness.
In this paper, we focus on the innovation output by associating it with the number of patent applications by the resident. Although
there is a gap between the number of patents and the real innovation observed in a country, the former is directly related to the extension
of knowledge and the improvement of processes in a society. Of course, this indicator, like all indicators, is incomplete and it offers a
partial description of what innovation is. Generally speaking, there exists a wide range of indicators to capture innovation (R&D ex-
penditures, growth of total factor productivity etc.) and; although we acknowledge that the number of patents is an imperfect measure of
innovation, we adopt here this classical proxy proposed by the specialized literature assuming that “patents are the most concrete and
* Corresponding author.
E-mail addresses: canhnguyen@ueh.edu.vn (N. Phuc Canh), Christophe.Schinckus@rmit.edu.vn (C. Schinckus), dinhthanh@ueh.edu.vn (S.D. Thanh).
https://doi.org/10.1016/j.inteco.2018.10.002
Received 30 November 2017; Received in revised form 25 October 2018; Accepted 26 October 2018
Available online 3 December 2018
2110-7017/© 2018 CEPII (Centre d'Etudes Prospectives et d'Informations Internationales), a center for research and expertise on the world economy. Published by
Elsevier B.V. All rights reserved.
N. Phuc Canh et al. International Economics 157 (2019) 134–169
comparable measure of innovative output across countries and time” (Stern et al. (2000), p.18).
The relationship between patents and economic growth has been largely studied in the specialized literature (Grossman and
Helpman, 1993). Several empirical studies investigate this issue from different perspectives (link with FDI, with TFP, with R&D
expenditures etc.) This article aims at combining two perspectives usually studied independently in the literature: the influence
of economic openness and the impact of the institutional quality on the number of patents. The existing studies mainly focused on
the economic determinants of patent applications while other works (detailed in the following section) rather investigate
the institutional influences. The contribution of this article is, therefore, to combine these two approaches by integrating the
institutional quality (indicators) in the definition of economic openness to investigate their combined effect on the resident patent
applications.
The paper proceeds has the following structure: the rest of this section overviews the works dealing with the importance of insti-
tutional quality on innovation while the second section will present our data and methodology. The section 3 will discuss our empirical
results while a final section will provide some concluding remarks and recommendations for policy-makers.
There is an important literature dealing with the influence of innovation on economic growth. Stern et al. (2000) and Schneider
(2005), for instance, explained that the GDP per capita can be perceived as a proxy for a country's individual stock of knowledge. In
doing so, they showed a positive impact on innovation implying that the higher the country's knowledge stock is, the higher the
innovation rate is (Lederman and Saenz, 2005). In the same vein, these authors identified a positive effect of human capital (defined
as mean years of secondary education) and R&D expenditures on the level of patents (Hasan and Tucci, 2010). Similarly, Fujimoto
et al. (2015) found a positive relationship between the number of patent applications, the TFP and the economic growth. Interest-
ingly, Schneider (2005), in line with Connolly (2003) did not show a significant impact of FDI on the domestic innovation. However,
Maskus and Penubarti (1995) found a positive influence of FDI on the number of patents (in countries with several patent-sensitive
sectors). In conclusion the, despite a growing literature on the topic, empirical studies on the influence of FDI are still inconclusive
since.
The notion of institution refers to what defines the rules in a society by setting “contextual constraints” on human behaviours
(Acemoglu and Robinson (2008)). Such ability (i.e. institutional quality) to define the rules is very difficult to measure. Broadly
speaking, the institutional quality is related to policies implemented/promoted by public organizations to define legal and cultural
rules of the environment in which socio-economic activities take place. Although the elements of such environment might be difficult
to capture, recent works in institutional economics (Kaufmann et al. (2011) contributed to the development of The World Governance
Indicators (WGIs). These indicators capture the ability of a country's citizens to participate in selecting their government (voice and
accountability); the likelihood of political instability and/or politically-motivated violence (Political stability and absence of
violence); the quality of public services, civil service, and policy formulation and implementation, the independence from political
pressures and the credibility of the government's commitment to its policies (government effectiveness); the ability of the government
to formulate and implement sound policies and regulations that permit and promote private sector development (the regulatory
quality); the extent to which agents have confidence in the rules of society, and in particular the quality of contract enforcement,
property rights, the police, and the courts, as well as the likelihood of crime and violence (the rule of law); and, finally, the control of
public power (Bank, 2015).
According to the specialized literature, the institutional quality is expected to support economic development and therefore
economic growth. In terms of innovation and patents, the institutional arrangement can affect accumulation and diffusion of
knowledge (Gradstein, 2004) implying a potential link between the institutional quality and the number of patent applications. This
potential relationship is often assumed in the literature but few studies actually investigated it. One can mention some empirical
studies (Tebaldi and Elmslie (2013) or Sala-i-Martin (2001)) showing that some institutional elements (control of corruption, rule
of law, regulatory quality and risk of expropriation) have a significant impact on the number of patents. Some particular aspects of
these indicators have also been individually investigated further. For instance, several studies investigated the influence of the
patent regimes (related to the rule of law and regulatory quality indicators) on the innovation outputs. Maskus and Penubarti
(1995) or Gould and Gruben (1996) emphasized the role of the protection of intellectual property right on the number of patents
and economic growth in different countries. However, these results must be nuanced: while Chen and Puttitanun (2005) also
confirmed the positive impact of a legal protection of innovations on the economic growth, other authors (Hall, 2007; Kanwar,
2012) rather emphasized the ambiguous influence of patent laws on economic growth. In a context of developing countries,
Branstetter et al. (2011) found a significant link between the institutional regime ruling patents and the economic growth. As
previously mentioned, we intend to combine the institutional quality indicators with some factors reflecting the economic openness
to better understand their combined effect on the number of patent applications and, therefore, discuss their eventual links with
economic growth.
Regarding empirical studies investigating the relationship between innovation and trade openness and FDI, it is worth
mentioning that the combination between the two latter is often associated with the financial development of the country. In this
context, one can mention Deidda and Fattouh (2002) who identified a strong link between innovation and financial development in
high-income countries. Interestingly, these authors claimed that this relationship is not significant for low-income countries. This
observation has been confirmed by Rioja and Valev (2004). Cecchetti and Kharroubi (2012) or Arcand et al. (2015) showed that a
higher level of financial development can generate a profitable environment for innovation and economic growth. This article
contributes to these debates by proposing another perspective on this potential relationship between financial development and
innovation. Specifically, we investigate the combined effect of economic openness and institutional quality on the resident patent
applications.
135
2. Methodology and data
This study uses the six indicators from WGIs to proxy the quality of the institutional environment of a country.1 These indicators
range from approximately 2.5 (weak) to 2.5 (strong) where higher estimated values represent a better institutional quality. Our
empirical study combines these measures with two parameters illustrating the economic openness: the net inflow foreign direct in-
vestment to GDP ratio and the logarithm of the total value of import and export to GDP ratio. These variables are our major explanatory
variables in our analysis of the number of patent applications that will be captured by the logarithm of total resident's patent applications
collected from the World Development Indicators (WDIs) of the World Bank. Our control variables for innovation include the income
level (logarithm of real GDP per capita) and the government spending (the ratio of general government final consumption expenditure to
GDP); the capital stock (logarithm of capital stock at current PPPs) and the human capital (the human capital index) from Penn World
Table (see Table 1).
Due to the availability of data from WDI and Penn World Table, we focus on the annual data for 83 countries from 1996 to 2014 (see
Appendix for countries list).
In line with the recent literature (Ben Naceur et al., 2017; Arcand et al., 2015) this study aims at identifying the potential drivers of
patent applications in relation to the role of institutions and the economic openness. In this perspective, the innovation (number of
patent applications) is used as the dependent variables while other control variables refer to human capital, capital stock, income level
and government expenditure (see equation (1)).
Patentit ¼ β1 Patentit1 þ δj Xjt þ εit (1)
in which: i, t are the country i at time t, respectively; Patent is the proxy for innovation; X is the vector of control variables including the
income level (Gdppc), the capital stock (Cap), the human capital (Hc) and the government spending (Govex) (see Table 1), in this vector, j
refers to jth variables in the vector; ε is the residual term; β and δ are the estimators. We investigate the impact of economic openness
and institutions on innovation by using the following strategy: firstly, we use the trade openness (Trade) and net inflow FDI (Fdi) as a
measure of the economic openness as explained in the equation (2):
Patentit ¼ β1 Patentit1 þ δj Xjt þ α1 Fdiit þ α2 Tradeit þ uit (2)
Secondly, we integrate the potential influence of the institutional quality on the innovation indicators as explained hereafter in the
equation (3):
Patentit ¼ β1 Patentit1 þ δj Xjt þ α1 Fdiit þ α2 Tradeit þ γ k Inquakt þ uit (3)
in which Inqua proxies for the institutional quality that includes the Control of corruption indicator (Concor), Government effectiveness
(Goveff), Political stability (Politic), Regulatory quality (Requa), Rule of Law (Law), and Voice and accountability (Voice), respectively
(see Table 1), k refers to kth indicator. Our methodology will give us a clear path to investigate if the combination of institutional quality
with economic openness has a significant influence on the number of patents in a country.
The major methodological problems we faced with our sample refer to two aspects: 1) we use a sample collected on dynamic panel
data with the lag of dependent variable as the independent variables, and; 2) the relationships between some independent variables such
as the human capital might have mutual effects with the dependent variable. In addition, the study sample of this research has a large
number of cross sections (N ¼ 83 countries) but a relatively short time window (1996–2014, i.e. T ¼ 19 years). In order to examine the
existence of cross-sectional dependence in our sample, the Pesaran's CD test (Pesaran (2004)) is applied to the lagged variables. The
results detailed in the Table A7 (see appendix) show the existence of a cross-sectional dependence between the variables. We, therefore,
used the Pesaran (2007)’s CIPS (Z(t-bar)) unit root tests to deal with our data. Due to the unbalanced nature of our sample, this CIPS test
cannot be done for the FDIs and the six institutional indicators. In this context, we tested endogeneity through different regression
models. Precisely, we used pooled OLS (Pool OLS), Pool OLS with year effects and country effects, fixed effects (FEM), random effects
(REM), to Feasible Generalized Least Squares (FGLS) (Zhang and Nian, 2013) (The Tables A8–A14 in Appendix show in detail all
findings). The results mixed with the changes of coefficient signs, while the Rho and Corr(u_i and x) in FEM are really large. We then
regress all aforementioned models with the lags of all independent variables (see the Tables A16–24 in Appendix for details), all results
appear to be consistent with the results of our main models suggesting the existence of a strong endogeneity.
We treat this endogeneity by using a two-step system GMM for the estimation of dynamic unbalanced panel data. For the case with a
strong endogeneity, the two-stage least squares (2SLS) could also have been a possible methodological choice to proceed. However,
estimations provided by 2SLS are often weak in the presence of heteroscedasticity (Lin and Lee, 2010). In this context, the generalized
method of moments (GMM) is more efficient (Lee, 2007). Precisely, system generalized methods of moments (GMM) estimators are
1
Measures are always partial and there exist some debates on the necessary biased and incomplete dimension of these indicators (Voigt, 2013). Precisely, all
institutional indicators (the Governance Indicators of World Bank; International Country Risk Guide; Polity IV measures etc.) are actually presented as a measure of
policy choice rather than a measure of the ability of a country to implement these choices. However, no doubt that these policy choices influence and shape the business
environment in which economic activity takes place. In this challenging context, we acknowledge the imperfect nature of our indicators but, following (Thomas, 2010),
we assume they are still the most appropriate indicators of institutional information for an economic analysis. This assumption is quite widely accepted since these
indicators are nowadays recognized as a reliable resource in many studies studying institutions (see KAUFMANN, D. & KRAAY, A. 2002. Growth without governance.
World Bank Policy Research Working Paper).
136
Table 1
Variables, definitions and sources.
Variable Definitions Sources
Dependent variable Patent Innovation - Logarithm of Patent applications (residents) WDI

Control variables Gdppc Income level - Logarithm of real GDP per capita WDI
Cap Capital stock - Logarithm of Capital stock at current PPPs Penn World Table
Hc Human capital - Human capital index (based on years of schooling and returns to education) Penn World Table
Govex Government expenditure - General government final consumption expenditure (% of GDP) WDI
Explanatory variables Fdi Capital integration - Foreign direct investment, net inflows (% of GDP) WDI
Trade Trade integration – the logarithm of total trade value including import and export (% of GDP) WDI
Concor Control of corruption indicator (estimate value) WGI
Goveff Government effectiveness indicator (estimate value) WGI
Politic Political Stability and Absence of Violence/Terrorism (estimate value) WGI
Requa Regulatory quality indicator (estimate value) WGI
Law Rule of Law indicator (estimate value) WGI
Voice Voice and Accountability indicator (estimate value) WGI
well-known to treat situations in which independent variables are not strictly exogenous. In such circumstances, the traditional fixed
effect estimator is inconsistent because the mean of the lagged dependent variable is correlated with the idiosyncratic error term. This
issue becomes particularly serious in dynamic panel data models with relatively few time periods and many individual units (Nickell,
1981). A particular solution has been introduced by Arellano and Bond (1991), Arellano and Bover (1995) (and extended by Blundell
and Bond (1998) and Blundell and Bond (1998)) who showed that the system GMM estimators can reduce the bias associated with the
fixed effects in short panels and solve the problem of endogeneity in dynamic panel data. It is worth noticing that a two-step system
GMM estimators is asymptotically more efficient than a one-step estimator (based on a sub-optimal weighting matrix). However, the
former might produce a bias of uncorrected standard errors when the instrument count is high, implying that the number of instruments
should be less than the individual dimension.
Following Roodman (2006), the validity of the instruments implemented in GMM can be tested by using the Hansen and the
Arellano-Bond's AR(2) tests for the estimation of autocorrelation. It is also worth mentioning that the estimated asymptotic standard
errors of the two-step GMM estimators can be reduced through a decomposition into in small samples (Windmeijer, 2005). Precisely,
Windmeijer (2005) proposed that a Monte Carlo simulation shows that the conventional asymptotic variance estimate of a two-step
GMM estimators is a good estimate of the variance of a GMM estimators using all the true values of the parameters to calculate the
efficient weight matrix. In other words, the estimated corrected variance of the two-step GMM estimators offer an accurate inference.
The two-step system GMM estimators are a good estimation tested in many existing studies (Baltagi, 2008) and that is why we used it as
a robustness check in this study.
The dynamic form of Equation (2) changes the way to interpret the estimated coefficients from GMM estimators. With the presence
of a lagged dependent variable in our dynamic models, all the estimated coefficients represent the short-run effect of the explanatory
variables. However, innovation is, by definition, a long-run process that requires a measure of the long run effect of economic openness
and institutional quality on innovations. Following the procedure suggested by Papke and Wooldridge (2005), we, therefore, estimate
the long run coefficients for main variables in Equation (2).
All results including the influences of institutions, of economic openness, and their associations on innovations and their long-run
coefficients for the 84 countries are summarized from the Tables 3–7. We have a no-significant result for the AR(2) test so that the
estimators from system-GMM are not subject to serial correlations of order two. In addition, we also have a no-significant result for the
Hansen test suggesting that the methodology we used was valid. We can therefore reasonably consider that our estimators are unbiased
and consistent for further analysis.
Table 2
Data description.
Variable Obs Mean Std. Dev. Min Max
Patent 1429 6.216 2.503 0.000 13.594

Gdppc 1577 9.029 1.436 5.346 11.425
Cap 1577 13.300 1.825 7.803 18.055
Hc 1577 2.732 0.617 1.107 3.734
Govex 1577 16.004 5.160 3.460 29.867
Fdi 1563 4.376 6.279 16.071 87.443
Trade 1577 4.302 0.538 2.750 6.093
Concor 1328 0.344 1.097 1.551 2.586
Goveff 1328 0.487 0.965 1.557 2.431
Politic 1328 0.050 0.963 2.806 1.663
Requa 1328 0.493 0.892 1.730 2.247
Law 1328 0.338 1.009 1.692 2.120
Voice 1328 0.277 0.958 1.883 1.826
137
Table 3
Economic integration and innovations.
Dep. var: Patent (1) (2) (3)
Patent (1) 0.9159*** [0.0036] 0.8409*** [0.0048] 0.8565*** [0.0049]

GDPpc 0.0979*** [0.0076] 0.0419*** [0.0085] 0.0441*** [0.0071]
Cap 0.0614*** [0.0025] 0.1226*** [0.0029] 0.1252*** [0.0048]
Hc 0.2217*** [0.0187] 0.2373*** [0.0135] 0.1672*** [0.0178]
Govex 0.0010 [0.0011] 0.0055*** [0.0014] 0.0064*** [0.0016]
Trade 0.2314*** [0.0082] 0.2233*** [0.0160]
FDI 0.0080*** [0.0011]
Long-run coefficients
Trade 1.5565*** [0.0788]
FDI 0.0555*** [0.0072]
N 1314 1314 1304

No. of IVs 71 72 73
No. of Countries 83 83 83
AR(-2) test 0.883 0.876 0.815
Hansen test 0.341 0.341 0.607
Note: ***, **, * denote significant levels at 1%, 5%, 10%, respectively. Standard errors are reported in [ ].
Table 4
Institutions and innovations.
Dep. var: Patent (4) (5) (6) (7) (8) (9)
Patent (1) 0.8077*** 0.7596*** 0.8410*** 0.8008*** 0.8117*** 0.8176***

[0.0136] [0.0178] [0.0094] [0.0175] [0.0145] [0.0105]
GDPpc 0.1323*** 0.1983*** 0.0932*** 0.1128*** 0.1382*** 0.0541***
[0.0192] [0.0256] [0.0138] [0.0207] [0.0204] [0.0137]
Cap 0.2001*** 0.2514*** 0.1710*** 0.2025*** 0.1969*** 0.1590***
[0.0144] [0.0213] [0.0115] [0.0172] ** [0.0166] [0.0125]
Hc 0.0835* 0.1294*** 0.1073** 0.1254** 0.1090** 0.1719***
[0.0460] [0.0478] [0.0424] [0.0625] [0.0439] [0.0420]
Govex 0.0083** 0.0144*** 0.0072*** 0.0108*** 0.0098*** 0.0057*
[0.0034] [0.0032] [0.0024] [0.0037] [0.0028] [0.0029]
Trade 0.1669*** 0.2001*** 0.2062*** 0.2570*** 0.1799*** 0.2531***
[0.0371] [0.0367] [0.0302] [0.0481] [0.0321] [0.0333]
FDI 0.0045* 0.0061** 0.0067*** 0.0087** 0.0061** 0.0062**
[0.0025] [0.0025] [0.0023] [0.0034] [0.0025] [0.0025]
Concor 0.1640***
[0.0162]
Goveff 0.2943***
[0.0361]
Politic 0.1392***
[0.0138]
Requa 0.1602***
[0.0373]
Law 0.1872***
[0.0240]
Voice 0.0545***
[0.0201]
Trade 0.8676*** 0.8325*** 1.2966*** 1.2899*** 0.9553*** 1.3879***
[0.1621] [0.1314] [0.1427] [-.1849] [0.1400] [0.1422]
FDI 0.0235* 0.0254** 0.0420*** 0.0436*** 0.0321** 0.0340**
[0.0130] [0.0103] [0.0144] [0.0170] [0.0131] [0.0133]
Inst 0.8527*** 1.2244*** 0.8757*** 0.8043*** 0.9943*** 0.2991***
[0.0898] [0.1097] [0.0989] [0.1856] [0.1017] [0.1041]
N 892 892 1098 820 892 1098

No. of IVs 52 52 59 46 52 59
No. of Countries 83 83 83 83 83 83
AR(-2) test 0.966 0.971 0.867 0.998 0.955 0.902
Hansen test 0.350 0.219 0.536 0.347 0.228 0.668
Note: (1) ***, **, * denote significant levels at 1%, 5%, 10%, respectively. (2) The Inst proxy for the Concor, Goveff, Politic, Requa, Law, and Voice, respectively. Standard
errors are reported in [ ].
3. Empirical results
The description of our data is summarized and presented in the Table 2 hereafter,
138
Table 5
Institutions, economic integrations and innovations (control of corruption/government effectiveness).
Dep. var: Patent (10) (11) (12) (13)
Patent (1) 0.8823*** [0.0057] 0.8988*** [0.0068] 0.8058*** [0.0080] 0.7955*** [0.0095]
GDPpc 0.0836*** [0.0071] 0.0816*** [0.0084] 0.1502*** [0.0082] 0.1633*** [0.0117]
Cap 0.1190*** [0.0058] 0.1114*** [0.0070] 0.2067*** [0.0074] 0.2128*** [0.0096]
Hc 0.1281*** [0.0166] 0.0842*** [0.0176] 0.0539** [0.0263] 0.0615** [0.0307]
Govex 0.0044*** [0.0013] 0.0066*** [0.0014] 0.0165*** [0.0018] 0.0154*** [0.0019]
Trade 0.1333*** [0.0154] 0.1133*** [0.0180] 0.1845*** [0.0175] 0.1557*** [0.0215]
FDI 0.0075*** [0.0014] 0.0030** [0.0012] 0.0110*** [0.0013] 0.0033*** [0.0012]
Concor/Goveff 0.2608*** [0.0689] 0.3077*** [0.0709] 0.4045*** [0.0790] 0.7496*** [0.0831]
Concor*Trade 0.0414** [0.0170] 0.0588*** [0.0166]
Concor*FDI 0.0041*** [0.0010]
Goveff*Trade 0.0389** [0.0180] 0.1212*** [0.0190]
Goveff*FDI 0.0092*** [0.0016]
Trade 1.1190*** [.1332] 0.7615*** [0.0843]
FDI 0.0296** [0.0120] 0.0159*** [0.0055]
Inst 3.0390*** [0.7131] 3.6651*** [0.4889]
Inst*Trade 0.5808*** [0.1649] 0.5925*** [0.1071]
Inst*FDI 0.0407*** [0.0101] 0.0448*** [0.0078]
N 1024 892 892 892

No. of IVs 74 76 75 76
No. of Countries 83 83 83 83
AR(-2) test 0.893 0.931 0.936 0.962
Hansen test 0.448 0.360 0.303 0.359
Note: (1)***, **, * denote significant levels at 1%, 5%, 10%, respectively. (2) The Inst proxy for the Concor and Goveff, respectively. Standard errors are reported in [ ].
Table 6
Institutions, economic integrations and innovations (political stability/regulatory quality).
Dep. var: Patent (14) (15) (16) (17)
Patent (1) 0.9000*** [0.0032] 0.8100*** [0.0103] 0.8207*** [0.0082] 0.8241*** [0.0156]
GDPpc 0.0429*** [0.0052] 0.1136*** [0.0102] 0.0885*** [0.0111] 0.1007*** [0.0135]
Cap 0.1070*** [0.0045] 0.2140*** [0.0108] 0.1698*** [0.0096] 0.1752*** [0.0157]
Hc 0.0783*** [0.0114] 0.0765*** [0.0268] 0.1093*** [0.0234] 0.0905** [0.0430]
Govex 0.0027*** [0.0007] 0.0175*** [0.0012] 0.0050*** [0.0017] 0.0127*** [0.0034]
Trade 0.1658*** [0.0101] 0.2760*** [0.0263] 0.1946*** [0.0161] 0.2031*** [0.0465]
FDI 0.0168*** [0.0005] 0.0033** [0.0013] 0.0075*** [0.0011] 0.0006 [0.0026]
Politic/Requa 0.7100*** [0.0278] 0.5472*** [0.0908] 0.5236*** [0.0814] 0.5109*** [0.1125]
Politic*Trade 0.1583*** [0.0073] 0.1073*** [0.0247]
Politic*FDI 0.0212*** [0.0020]
Requa*Trade 0.0796*** [0.0170] 0.0979*** [0.0261]
Requa*FDI 0.0107*** [0.0020]
Trade 1.4525*** [0.0779] 1.1549*** [0.1841]
FDI 0.0175*** [0.0064] 0.0036 [0.0148]
Inst 2.8795*** [0.5052] 2.9045*** [0.7543]
Inst*Trade 0.5645*** [0.1353] 0.5567*** [0.1704]
Inst*FDI 0.1114*** [0.0129] 0.0608*** [0.0132]
N 1098 892 1024 820

No. of IVs 83 75 74 66
AR(-2) test 0.913 0.924 0.861 0.969
Hansen test 0.376 0.211 0.802 0.572
Note: (1)***, **, * denote significant levels at 1%, 5%, 10%, respectively. (2) The Inst proxy for the Politic and Requa, respectively. Standard errors are reported in [ ].
Regarding the relationship between the number of patent applications and the control variables, we can observe a positive influence
of the size of the market (capital stock - Cap) and the years of schooling (Human Capital - Hc) on the former. In line with several
empirical studies (Schneider, 2005; Tebaldi and Elmslie, 2013), these observations suggest that the number of patents depends on the
level of financialization of the economy (easing access to capital) and that the more educated the human capital is, the higher the level of
innovation is. Because national infrastructures ease and support research activities, the government expenditures can also boost do-
mestic innovation as observed in our estimates showing a positive effect of the former on the number of patents.
Interestingly, GDP per capita (GDPpc) has a negative relationship on the level of patent applications. This observation is quite
surprising and not necessarily in line with the existing studies that usually suggest a positive link between innovation and per capita GDP
(Tebaldi and Elmslie, 2013; Ben Naceur et al., 2017). On this aspect, it is important to clarify how we define the concept of innovation.
As detailed in the section 3, we associated innovation with the logarithm of patent applications (residents) while other empirical studies
139
Table 7
Institutions, economic integrations and innovations (rule of law/voice and accountability).
Dep. var: Patent (18) (19) (20) (21)
Patent (1) 0.8952*** [0.0059] 0.8853*** [0.0017] 0.8796*** [0.0059] 0.8871*** [0.0069]
GDPpc 0.0918*** [0.0079] 0.0936*** [0.0083] 0.0537*** [0.0083] 0.0478*** [0.0075]
Cap 0.1137*** [0.0063] 0.1203*** [0.0069] 0.1134*** [0.0057] 0.1009*** [0.0066]
Hc 0.0967*** [0.0158] 0.0689*** [0.0195] 0.1087*** [0.0123] 0.1021*** [0.0145]
Govex 0.0047*** [0.0014] 0.0061*** [0.0016] 0.0098*** [0.0019] 0.0088*** [0.0018]
Trade 0.1021*** [0.0102] 0.0853*** [0.0124] 0.1756*** [0.0137] 0.1449*** [0.0166]
FDI 0.0117*** [0.0010] 0.0037*** [0.0010] 0.0084*** [0.0009] 0.0017** [0.0007]
Law/Voice 0.7251*** [0.0778] 0.8332*** [0.0765] 0.5837*** [0.0843] 0.8775*** [0.0713]
Law*Trade 0.1479*** [0.0181] 0.1743*** [0.0177]
Law*FDI 0.0057*** [0.0011]
Voice*Trade 0.1328*** [0.0206] 0.2135*** [0.0173]
Voice*FDI 0.0102*** [0.0015]
Trade 0.7440*** [0.0887] 1.2837*** [.0897]
FDI 0.0319*** [0.0086] 0.0153*** [0.0058]
Inst 7.2640*** [0.7786] 7.7732*** [0.9044]
Inst*Trade 1.5197*** [0.1820] 1.8912*** [0.2205]
Inst*FDI 0.0498*** [0.0109] 0.0903*** [0.0148]
N 892 892 892 892

No. of IVs 83 75 75 76
AR(-2) test 0.941 0.951 0.930 0.942
Hansen test 0.401 0.498 0.463 0.387
Note: (1)***, **, * denote significant levels at 1%, 5%, 10%, respectively. (2) The Inst proxy for the Law and Voice, respectively. Standard errors are reported in [ ].
measured innovation through the estimation of other indicators: the growth of total factor productivity (Ben Naceur et al., 2017); the
sum (stock) of utility patents granted to scholars (Lederman and Saenz, 2005; Hu and Png, 2013) or the R&D expenditure (Hasan and
Tucci, 2010). Our methodology (supported by several robustness checks - see appendix A16 to A24) emphasizes a very important point:
the relative importance of innovation in high/low income countries. Precisely, the negative effect of the log GDP per capita on the log of
patent application implies that higher income countries have lower growth rate in innovative activities. That might be understood by the
fact that these countries have accumulated a significant number of patents explaining that the growth rate of new patent applications is
lower. Corollary, the growth of rate of patent applications is much higher in low-income countries where a smaller number of patents are
actually registered. Our alternative methodology can actually be seen as a complementary perspective to the existing studies on
innovation. Precisely, it allows us to focus on the relative importance of patent applications in relation to the GDP pc. In this context,
observations indicate that, on average, the higher level of income we have, the less patent applications (per capita) we observe. Beyond
this methodological difference in the way of capturing the innovation, our results suggest that the number of patents is independent
from the real GDPpc. Furthermore, in combination with the positive impact of the human capital variable on the number of patent
application, the former observation also suggests that this variable (GDPpc) might not be an appropriate proxy for a country's individual
stock of knowledge (contrasting with works of Stern et al. (2000) or Schneider (2005), associating these two concepts).
In accordance with some existing works (Tebaldi and Elmslie, 2008, 2013), our results show an expected relationships between the
institutional environment and the number of patents. Specifically, all indicators related to institutional quality (the control of cor-
ruption, the government effectiveness, the political stability, the regulatory quality, the rule of law and the voice) have a positive in-
fluence on the number of patent applications showing that market-friendly policies, protection of property rights, a good control of
corruption combined with a more effective judiciary environment, can ease and favour innovation in a country.
The significant effect of institutional quality on the number of patents highlights the important role played by the institutional
environment in stimulating the research activities and the innovation of a country (which is vital for the long-run economic growth).
This result suggests that a better institutional quality reduces the asymmetric information that decreases the transaction cost and the
risk. Such situation, therefore, creates a more flexible environment for innovative activities. These results provide significant empirical
evidence that are helpful for policymakers aiming to stimulate the number of patents and the long-term economic growth.
Our indicators characterizing the economic openness show different trends: The net inflows of foreign direct investment (FDI)
appear to have a positive influence on innovation while observations related to exports/imports corroborate the existing literature on
the topic. The results concerning the FDI are interesting because they indicate another story than the one suggested by existing studies.
Precisely, several empirical works found no relationship between FDI and some determinants of innovation such as R&D spillovers
(Lichtenberg and de La Potterie, 1996); the sum (stock) of utility patents granted to scholars (Lederman and Saenz, 2005) or the growth
of total factor productivity (Schneider, 2005). However, our results indicate that foreign direct investment inflows can play a positive
role in the number of patent applications in a country confirming the works of Grossman and Helpman (1995) or Bardhan (1998)
supporting the idea that FDI can help disseminate technology to the host country. Meanwhile, the net FDI capital flow to GDP has a
significant positive coefficient with the residents' patent applications. This result indicates that the FDI flow, as noted in many previous
empirical works presents positive technological spillover effects on domestic innovations. This result re-emphasizes the important role
played by FDI capital flow in the domestic economic growth through the channel of technological spillover effects on patents. FDI flows
140
can indeed increase the rate of technical progress in the host country (due to a more advanced technology and better management
practices used by foreign firms) but these effects depend on several factors including the level of advanced technology available in the
host economy; the economic stability; the state investment policy and the degree of openness and the amount of human capital (Findlay,
1978). In other words, this impact depends on the institutional quality.
Better institutions mean a better protection for foreign investors implying an easier transfer of technology into host countries, which
then stimulates more efficiency technological spillovers. In this context, a better institutional quality also attracts a significant level of
FDI flow providing capital flows to support domestic economic activities and innovation as well. Related to this point, Duncan (2014)
found that a lower institutional quality attracted less foreign investment generating a smaller foreign-owned sector. Furthermore, a
Fig. 1. The overview of the trade activities and innovations.
141
better institutional quality protecting property rights and supporting freedom of choices can change the growth effects from negative to
positive (Farhadi et al., 2015). A better institutional quality also reduces the information friction and risk by increasing the market
efficiency and offering a better property right protection that might simulate risk-taking behaviours – such situation creates incentives
for inward FDI to invest in new projects rather than operating via merger and acquisition (Wang and Wong, 2009).
The other indicator of economic openness (Trade) appears to have a negative effect on the number of patent applications. According
to the mainstream literature Coe and Helpman (1995), Coe et al. (1995) and Bhattacharya and Bloch (2004), the level of import usually
has a positive influence on the domestic innovation. However, as showed in the Fig. 1 (see Appendix), the domestic innovation is
positive in line with the total value of both export and import activities, while it has negative relationships with the levels of trade
activities. In our empirical investigations, we use the ratio of total trade value to GDP to present for the trade openness implying that
higher trade activities are expected to contribute to domestic innovations if the domestic economy has the capability to absorb the
potential benefits of trade. Similarly, if the domestic economy is unable to provide an appropriate environment to stimulate the domestic
economic activities, a higher proportion of trade values to the GDP can potentially be harmful to the domestic number of patents.
The combined effect of the economic openness with institutional quality reveals an interesting story. Whereas the combination, pair-
by-pair, of all indicators having a positive impact keeps the same positive influence, the combination of all indicators of institutional
quality with the level of trade indicate a negative effect on innovation. While the positive impact of institutional quality on economic
openness indicators can easily be understood (confirming existing studies (Bhaumik et al., 2016; Cingano and Pinotti, 2016 on the
topic); the negative effect might be surprising at first sight. However, this observation actually confirms some empirical investigations
(Yanikkaya, 2003 or Chandran and Munusamy, 2009): although a better institutional quality leads to lower transaction cost, risk and a
better economic context, the domestic market might not have the ability to compete with international producers on the national level.
Such situation can be problematic since it generates a loss of motivation in seeking necessary resources for innovation. For instance,
Yanikkaya (2003) found that trade barriers are positively associated with the economic situation, especially for developing countries. In
the same vein, Chandran and Munusamy (2009) investigated the long-run relationship between trade openness and manufacturing
activities and they found that openness did not contribute to economic growth in Malaysia leading the government to adjust long-term
policy initiatives. Although, a better institutional quality in line with a higher trade openness, create more opportunities for interna-
tional producers to satisfy the needs of domestic consumers; this combination can also distort the domestic economic activities more
severely. In such context, the improvement of institutional quality combined with a higher trade openness might create a negative effect
of trade openness on the innovation of a country.
Notably, the long-run coefficients of FDI flow, trade openness and institutional quality are significant and consistent with the short-
run effects. This observation is an important contribution inviting policymakers to consider these factors both together in a short- and
long-run policy setting. Moreover, all combined effects between institutional quality and economic integrations indicators are stronger
in the long term implying that the improvement in the institution and the higher economic openness have a higher marginal impact in
the long-term economic growth. These results emphasize the important implications of a well-defined long-run policy strategy.
It is worth mentioning that our results passed through several robustness checks. Precisely, we reproduced our estimations for each
country to identify a potential country effect. As presented in the Tables A15 And A25 (in appendix), our econometric analysis does not
exhibit any specific country-year effect. We also reproduced our estimations by using a synthetic index capturing all measures of
institutional quality by using a principal component analysis. All results (presented in the Table A6 in appendix) found through this
technique also confirm our first estimations supporting the robustness of our analysis.
4. Conclusion
This article investigates some aspects of economic growth, particularly the role of institutional quality and the economic openness on
the level of innovation for a country. The study examines the influence of institutional quality, trade openness, and FDI flow on the
innovation of 84 countries in the period 1996–2014. Through a methodology based on a two-step sys-GMM estimators for unbalanced
panel data, our study gets some interesting results.
First, the institutional quality appears to be a vital driver for innovation. By the impacts on the asymmetric information, transaction
cost, and risk; institutions have a positive effect on the number of patent applications. This effect is even stronger in the long-run as
suggested in our long-run estimators.
Second, the economic openness through the FDI flow and trade openness have different effects. While the higher inward FDI flow has
a positive effect on innovations, the trade openness (as the total trade value to GDP) appears to have a negative impact. These empirical
observations are significant and consistent for both short-run and long-run. This fact implies that the FDI flow presents a positive
technological spillover effect whereas the trade openness is only profitable for countries having the capability to absorb it. Such
observation invites policy-makers to think about a sequentially in their long-term macroeconomic policy. Precisely, an improvement of
the domestic institutional quality in a first step appears to be a necessary condition to have a full benefit of a potential spillover effect
from FDI.
Third, as the most notable contribution, study finds that the effects of economic openness are exacerbated by the improvement of
institutional quality. In fact, by using the interaction terms between each institutional indicator with the FDI flow and trade openness,
respectively, we find that the effects of FDI flow and trade openness are magnified by the improvement of institutional quality. These
results are important for both scholars, practitioners, and but also for policy-makers in setting up the short-run and long-run policies for a
sustainable economic growth in which the improvement of institutional environment can actually enhanced the positive effect of two
independent economic factors.
142
Table A1
Country list.
Argentina Denmark Italy New Zealand Sri Lanka

Armenia Ecuador Japan Norway Sudan
Australia Egypt, Arab Rep. Jordan Pakistan Sweden
Austria Estonia Kazakhstan Paraguay Switzerland
Bangladesh Finland Kenya Peru Tajikistan
Barbados France Korea, Rep. Philippines Thailand
Belgium Germany Kyrgyz Republic Poland Trinidad and Tobago
Brazil Greece Latvia Portugal Tunisia
Brunei Darussalam Guatemala Lithuania Romania Turkey
Bulgaria Hong Kong SAR, China Macao SAR, China Russian Federation Ukraine
Cambodia Hungary Madagascar Saudi Arabia United Kingdom
Canada Iceland Malaysia Serbia United States
Chile India Mexico Singapore Uruguay
China Indonesia Moldova Slovak Republic Vietnam
Colombia Iran, Islamic Rep. Morocco Slovenia Yemen, Rep.
Croatia Ireland Mozambique South Africa
Czech Republic Israel Netherlands Spain
Table A2
Institutions, Economic integration and Innovation (with new trade openness proxy).
Dep. var: Patent Tradenew FDI Concor Politic Goveff Requa Law Voice
Patent (1) 0.923*** 0.930*** [0.005] 0.824*** 0.910*** 0.787*** 0.854*** 0.809*** 0.900***
[0.004] [0.011] [0.007] [0.014] [0.013] [0.012] [0.006]
GDPpc ¡0.066*** ¡0.067*** ¡0.186*** ¡0.093*** ¡0.243*** ¡0.140*** ¡0.198*** ¡0.069***
[0.006] [0.007] [0.021] [0.012] [0.027] [0.020] [0.023] [0.012]
Cap 0.072*** 0.075*** 0.191*** 0.108*** 0.229*** 0.162*** 0.204*** 0.102***
[0.003] [0.004] [0.011] [0.007] [0.018] [0.014] [0.014] [0.006]
Hc 0.183*** 0.149*** 0.238*** 0.125*** 0.283*** 0.195*** 0.264*** 0.124***
[0.019] [0.020] [0.040] [0.037] [0.046] [0.048] [0.042] [0.035]
Govex 0.0015* 0.002* 0.007** 0.005*** 0.012*** 0.004 0.008*** 0.006***
[0.0008] [0.001] [0.003] [0.002] [0.003] [0.004] [0.003] [0.002]
Tradenew ¡0.080*** ¡0.083*** ¡0.121*** ¡0.097*** ¡0.132*** ¡0.129*** ¡0.139*** ¡0.111***
[0.006] [0.008] [0.017] [0.013] [0.017] [0.017] [0.015] [0.013]
FDI 0.007*** 0.006** 0.006*** 0.007*** 0.007** 0.007*** 0.006***
[0.001] [0.002] [0.002] [0.002] [0.003] [0.002] [0.002]
INST 0.137*** 0.052*** 0.243*** 0.096*** 0.162*** 0.013
[0.019] [0.011] [0.036] [0.035] [0.022] [0.013]
Tradenew ¡1.178*** ¡0.685*** ¡1.082*** ¡0.617*** ¡0.880*** ¡0.730*** ¡0.880***
[0.069] [0.099] [0.109] [0.088] [0.112] [0.080] [0.112]
FDI 0.095*** 0.033** 0.071*** 0.033*** 0.045** 0.037*** 0.045***
[0.014] [0.014] [0.024] [0.011] [0.019] [0.012] [0.019]
INST 0.777*** 0.579*** 1.140*** 0.658*** 0.850*** 0.658***
[0.101] [0.120] [0.129] [0.212] [0.099] [0.212]
N 1314 1304 892 1098 892 820 892 820

No. of IVs 72 73 52 59 52 46 52 46
Countries 83 83 83 83 83 83 83 83
AR(2) test (p-value) 0.892 0.816 0.964 0.870 0.968 0.999 0.966 0.999
Hansen test (p-value) 0.285 0.415 0.329 0.384 0.227 0.420 0.222 0.420
Note: tradenew is calculated by using the total trade value for each year from 1996 to 2014 to divide for the fixed nominal GDP in 1996 (as the fixed year) then to multiple
for 100 (to have values in percentages). *, **, *** are significant levels at 10%, 5%, and 1%, respectively. Standard errors are reported in [ ]. The number in bold are
statistically significant.
143
Table A3
N. Phuc Canh et al.

Institutions, Economics integration and Innovations: the associations between institutions and economic integration (with new trade openness proxy).
Dep. var: Patent Concor Politic Goveff Requa Law Voice
Tradenew FDI Tradenew FDI Tradenew FDI Tradenew FDI Tradenew FDI Tradenew FDI
Patent (1) 0.914*** 0.920*** 0.917*** 0.813*** 0.817*** 0.817*** 0.847*** 0.824*** 0.865*** 0.854*** 0.884*** 0.885***
[0.004] [0.006] [0.002] [0.005] [0.007] [0.006] [0.006] [0.011] [0.005] [0.006] [0.005] [0.004]
GDPpc ¡0.091*** ¡0.102*** ¡0.073*** ¡0.160*** ¡0.190*** ¡0.203*** ¡0.120*** ¡0.153*** ¡0.151*** ¡0.152*** ¡0.090*** ¡0.085***
[0.006] [0.010] [0.004] [0.010] [0.007] [0.010] [0.007] [0.023] [0.009] [0.011] [0.007] [0.007]
Cap 0.094*** 0.097*** 0.091*** 0.203*** 0.192*** 0.195*** 0.150*** 0.175*** 0.147*** 0.152*** 0.111*** 0.107***
[0.003] [0.005] [0.002] [0.005] [0.005] [0.007] [0.005] [0.013] [0.006] [0.007] [0.005] [0.005]
Hc 0.134*** 0.144*** 0.142*** 0.197*** 0.164*** 0.197*** 0.116*** 0.177*** 0.225*** 0.225*** 0.202*** 0.214***
[0.018] [0.015] [0.013] [0.020] [0.020] [0.016] [0.020] [0.040] [0.016] [0.016] [0.014] [0.013]
Govex 0.002* 0.005*** 0.003*** 0.014*** 0.012*** 0.013*** 0.005*** 0.008** 0.007*** 0.007*** 0.008*** 0.007***
[0.001] [0.001] [0.001] [0.001] [0.002] [0.002] [0.002] [0.003] [0.001] [0.002] [0.002] [0.002]
Tradenew ¡0.068*** ¡0.073*** ¡0.105*** ¡0.174*** ¡0.103*** ¡0.104*** ¡0.087*** ¡0.114*** ¡0.110*** ¡0.108*** ¡0.129*** ¡0.129***
[0.006] [0.006] [0.004] [0.010] [0.009] [0.008] [0.007] [0.015] [0.006] [0.005] [0.007] [0.004]
FDI 0.007*** 0.005*** 0.016*** 0.001 0.009*** 0.004*** 0.004*** 0.002 0.010*** 0.006*** 0.009*** 0.005***
[0.001] [0.001] [0.0005] [0.002] [0.001] [0.001] [0.001] [0.002] [0.002] [0.001] [0.001] [0.001]
INST 0.253*** 0.104*** 0.508*** 0.705*** 0.341*** 0.429*** 0.412*** 0.464*** 0.368*** 0.417*** 0.325*** 0.326***
[0.045] [0.037] [0.023] [0.054] [0.036] [0.031] [0.045] [0.087] [0.041] [0.046] [0.041] [0.044]
INST*Tradenew ¡0.041*** ¡0.015** ¡0.099*** ¡0.128*** ¡0.026*** ¡0.049*** ¡0.051*** ¡0.063*** ¡0.054*** ¡0.064*** ¡0.065*** ¡0.073***
[0.009] [0.007] [0.005] [0.010] [0.006] [0.006] [0.008] [0.017] [0.007] [0.009] [0.008] [0.010]
INST*FDI 0.003*** 0.023*** 0.006*** 0.006** 0.002* 0.006***
[0.001] [0.002] [0.001] [0.003] [0.001] [0.002]
144
Tradenew ¡0.785*** ¡0.915*** ¡1.267*** ¡0.930*** ¡0.564*** ¡0.568*** ¡0.573*** ¡0.648*** ¡0.813*** ¡0.742*** ¡1.108*** ¡1.127***
[0.061] [0.085] [0.042] [0.046] [0.053] [0.041] [0.051] [0.090] [0.053] [0.046] [0.063] [0.048]
FDI 0.084*** 0.060*** 0.197*** 0.004 0.047*** 0.024*** 0.026*** 0.010 0.074*** 0.043*** 0.075*** 0.042***
[0.015] [0.014] [0.008] [0.009] [0.008] [0.005] [0.008] [0.013] [0.012] [0.005] [0.009] [0.007]
INST 2.931*** 1.294*** 6.149*** 3.763*** 1.868*** 2.340*** 2.697*** 2.640*** 2.723*** 2.857*** 2.791*** 2.845***
[0.463] [0.414] [0.193] [0.280] [0.166] [0.176] [0.294] [0.444] [0.275] [0.295] [0.314] [0.353]
INST*Tradenew ¡0.473*** ¡0.186** ¡1.203*** ¡0.681*** ¡0.144*** ¡0.265*** ¡0.332*** ¡0.358*** ¡0.397*** ¡0.438*** ¡0.559*** ¡0.639***
[0.098] [0.086] [0.041] [0.054] [0.028] [0.034] [0.056] [0.089] [0.051] [0.059] [0.068] [0.082]
INST*FDI 0.034*** 0.122*** 0.031*** 0.033** 0.015 0.055***
[0.012] [0.014] [0.006] [0.015] [0.009] [0.013]
N 1024 892 1098 892 892 892 1024 892 892 892 892 892
No. of IVs 74 76 83 83 83 83 83 83 83 83 83 83
Countries 83 83 83 75 75 76 74 54 74 75 75 76

AR(2) test (p-value) 0.886 0.927 0.935 0.955 0.953 0.963 0.856 0.997 0.946 0.956 0.938 0.946
Hansen test (p-value) 0.563 0.352 0.400 0.329 0.600 0.568 0.979 0.247 0.411 0.632 0.326 0.286
Note: tradenew is calculated by using the total trade value for each year from 1996 to 2014 to divide for the fixed nominal GDP in 1996 (as the fixed year) then to multiple for 100 (to have values in percentages). *, **, *** are
significant levels at 10%, 5%, and 1%, respectively. Standard errors are reported in [ ]. The number in bold are statistically significant.
Table A4
Institutions, Economic integration and innovations (Robust two-step system GMM estimations).
Dep. var: Patent Basic Trade FDI Concor Politic Goveff Requa Law Voice
Patent (1) 0.916*** 0.841*** 0.857*** 0.808*** 0.841*** 0.760*** 0.801*** 0.812*** 0.818***
[0.027] [0.061] [0.054] [0.065] [0.052] [0.083] [0.065] [0.066] [0.065]
GDPpc ¡0.098** ¡0.042 ¡0.044 ¡0.132* ¡0.093* ¡0.198** ¡0.113* ¡0.138** ¡0.054
[0.048] [0.050] [0.050] [0.071] [0.052] [0.089] [0.065] [0.069] [0.047]
Cap 0.061*** 0.123*** 0.125*** 0.200*** 0.171*** 0.251*** 0.203*** 0.197*** 0.159***
[0.015] [0.042] [0.041] [0.060] [0.054] [0.080] [0.059] [0.062] [0.054]
Hc 0.222 0.237 0.167 0.083 0.107 0.129 0.125 0.109 0.172
[0.140] [0.198] [0.179] [0.199] [0.199] [0.201] [0.240] [0.205] [0.199]
Govex 0.001 0.005 0.006 0.008 0.007 0.014 0.011 0.010 0.006
[0.004] [0.006] [0.006] [0.008] [0.005] [0.009] [0.008] [0.007] [0.007]
Trade ¡0.231** ¡0.223*** ¡0.167* ¡0.206** ¡0.200** ¡0.257** ¡0.180** ¡0.253**
[0.104] [0.095] [0.090] [0.090] [0.094] [0.120] [0.087] [0.106]
FDI 0.008*** 0.005 0.007 0.006 0.009 0.006 0.006
[0.004] [0.005] [0.005] [0.005] [0.006] [0.005] [0.005]
INST 0.164*** 0.139** 0.294** 0.160 0.187** 0.055
[0.058] [0.062] [0.116] [0.098] [0.078] [0.068]
Trade ¡1.454*** ¡1.557*** ¡0.868** ¡1.297*** ¡0.832*** ¡1.290*** ¡0.955*** ¡1.388***
[0.197] [0.275] [0.350] [0.363] [0.275] [0.426] [0.344] [0.382]
FDI 0.056** 0.024 0.042 0.025 0.044 0.032 0.034
[0.025] [0.025] [0.028] [0.019] [0.029] [0.025] [0.027]
INST 0.853*** 0.876*** 1.224*** 0.804* 0.994*** 0.299
[0.189] [0.262] [0.246] [0.428] [0.226] [0.314]
N 1314 1314 1304 892 1098 892 820 892 1098

No. of IVs 71 72 73 52 59 52 46 52 59
Countries 83 83 83 83 83 83 83 83 83
AR(2) test (p-value) 0.883 0.877 0.815 0.967 0.867 0.972 0.998 0.956 0.903
Hansen test (p-value) 0.341 0.341 0.607 0.350 0.536 0.219 0.347 0.228 0.668
Note: *, **, *** are significant levels at 10%, 5%, and 1%, respectively. Standard errors are reported in []. The number in bold are statistically significant.
145
N. Phuc Canh et al.
Table A5
Institutions, Economics integration and innovations: the associations between institutions and economic integration (Robust two-step system GMM estimations).
Dep. var: Patent Concor Politic Goveff Requa Law Voice
Trade FDI Trade FDI Trade FDI Trade FDI Trade FDI Trade FDI
Patent (1) 0.882*** 0.813*** 0.900*** 0.810*** 0.806*** 0.761*** 0.821*** 0.801*** 0.895*** 0.810*** 0.796*** 0.887***
[0.045] [0.070] [0.041] [0.049] [0.075] [0.091] [0.054] [0.075] [0.045] [0.066] [0.071] [0.051]
GDPpc ¡0.084 ¡0.124* ¡0.043 ¡0.114** ¡0.150** ¡0.183* ¡0.089 ¡0.109 ¡0.092 ¡0.123* ¡0.037 ¡0.048
[0.052] [0.066] [0.036] [0.054] [0.074] [0.101] [0.054] [0.073] [0.058] [0.068] [0.054] [0.052]
Cap 0.119*** 0.190*** 0.107*** 0.214*** 0.207*** 0.238*** 0.170*** 0.195*** 0.114*** 0.190*** 0.177*** 0.101**
[0.038] [0.061] [0.040] [0.047] [0.066] [0.085] [0.052] [0.067] [0.040] [0.060] [0.059] [0.045]
Hc 0.128 0.084 0.078 0.076 0.054 0.117 0.109 0.035 0.097 0.085 0.054 0.102
[0.192] [0.174] [0.134] [0.243] [0.168] [0.203] [0.194] [0.179] [0.207] [0.185] [0.210] [0.212]
Govex 0.004 0.009 0.003 0.017* 0.016** 0.012 0.005 0.014 0.005 0.009 0.007 0.009
[0.005] [0.009] [0.006] [0.010] [0.008] [0.011] [0.004] [0.010] [0.006] [0.008] [0.009] [0.007]
Trade ¡0.133 ¡0.167* ¡0.166* ¡0.276** ¡0.184* ¡0.174* ¡0.195* ¡0.190 ¡0.102 ¡0.171* ¡0.242* ¡0.145*
[0.091] [0.100] [0.086] [0.118] [0.095] [0.100] [0.103] [0.116] [0.074] [0.088] [0.125] [0.087]
FDI 0.008 0.006 0.017*** 0.003 0.011 0.008 0.008* 0.001 0.012** 0.009 0.006 0.002
[0.005] [0.007] [0.005] [0.007] [0.008] [0.009] [0.004] [0.009] [0.005] [0.007] [0.005] [0.006]
INST 0.261 0.381 0.710* 0.547 0.405 0.717 0.524 0.441 0.725 0.517 0.267 0.878*
[0.495] [0.311] [0.378] [0.533] [0.470] [0.443] [0.351] [0.337] [0.463] [0.357] [0.315] [0.496]
INST*Trade ¡0.041 ¡0.053 ¡0.158* ¡0.107 ¡0.039 ¡0.101 ¡0.080 ¡0.064 ¡0.148 ¡0.077 ¡0.045 ¡0.213*
[0.111] [0.069] [0.090] [0.128] [0.096] [0.092] [0.071] [0.077] [0.103] [0.077] [0.067] [0.123]
146
INST*FDI 0.001 0.021* 0.003 0.008 0.001 0.010

[0.008] [0.011] [0.011] [0.012] [0.010] [0.011]
Trade ¡1.133* ¡0.894** ¡1.658*** ¡1.452*** ¡0.950*** ¡0.728*** ¡1.085*** ¡0.954*** ¡0.974* ¡0.900*** ¡1.183*** ¡1.284**
[0.605] [0.351] [0.374] [0.388] [0.332] [0.280] [0.397] [0.343] [0.510] [0.306] [0.414] [0.521]
FDI 0.064* 0.034 0.168** 0.018 0.057 0.032 0.042* 0.007 0.112** 0.045 0.031 0.015
[0.038] [0.036] [0.070] [0.035] [0.043] [0.037] [0.023] [0.045] [0.050] [0.040] [0.026] [0.053]
INST 2.215 2.038 7.099* 2.880 2.084 3.006** 2.921 2.217 6.918** 2.720* 1.305 7.773*
[4.054] [1.478] [3.882] [2.786] [2.277] [1.457] [1.860] [1.550] [3.462] [1.462] [1.491] [4.249]
INST*Trade ¡0.351 ¡0.283 ¡1.583* ¡0.564 ¡0.200 ¡0.425 ¡0.444 ¡0.320 ¡1.411* ¡0.405 ¡0.218 ¡1.891*
[0.923] [0.345] [0.928] [0.661] [0.489] [0.345] [0.392] [0.369] [0.794] [0.347] [0.324] [1.096]
INST*FDI 0.006 0.111** 0.013 0.041 0.003 0.090

[0.040] [0.051] [0.043] [0.054] [0.051] [0.095]
N 1024 892 1098 892 892 892 1024 892 892 892 892 892
No. of IVs 74 54 83 75 75 54 74 54 74 54 53 76
Countries 83 83 83 83 83 83 83 83 83 83 83 83
AR(2) test 0.893 0.962 0.913 0.924 0.937 0.987 0.862 0.992 0.941 0.964 0.970 0.942
(p-value)
Hansen test 0.448 0.398 0.376 0.211 0.303 0.291 0.802 0.361 0.401 0.346 0.587 0.387
(p-value)
Note: *, **, *** are significant levels at 10%, 5%, and 1%, respectively. Standard errors are reported in [ ]. The number in bold are statistically significant.
N. Phuc Canh et al.
Table A6
Institutions, Economics integration and innovations: the associations between institutions and economic integration (Institutions: average of six institutional indicators).
Dep. Var: Patent Two-step system GMM Robust Two-step system GMM Two-step system GMM Robust Two-step system GMM
INSTnew Trade FDI INSTnew Trade FDI INSTnew Tradenew FDI INSTnew Tradenew FDI
Patent (1) 0.818*** 0.825*** 0.812*** 0.818*** 0.825*** 0.812*** 0.863*** 0.843*** 0.828*** 0.863*** 0.843*** 0.828***
[0.011] [0.013] [0.015] [0.060] [0.065] [0.068] [0.006] [0.011] [0.011] [0.049] [0.064] [0.061]
GDPpc ¡0.132*** ¡0.124*** ¡0.130*** ¡0.132** ¡0.124* ¡0.130* ¡0.143*** ¡0.175*** ¡0.180*** ¡0.143** ¡0.175** ¡0.180**
[0.015] [0.019] [0.021] [0.060] [0.063] [0.074] [0.014] [0.019] [0.021] [0.067] [0.084] [0.089]
Cap 0.191*** 0.188*** 0.201*** 0.191*** 0.188*** 0.201*** 0.152*** 0.176*** 0.183*** 0.152*** 0.176*** 0.183***
[0.013] [0.017] [0.018] [0.059] [0.065] [0.067] [0.007] [0.014] [0.013] [0.047] [0.060] [0.058]
Hc 0.104** 0.008 0.042 0.104 0.008 0.042 0.154*** 0.177*** 0.202*** 0.154 0.177 0.202
[0.044] [0.048] [0.051] [0.201] [0.204] [0.180] [0.037] [0.041] [0.036] [0.205] [0.230] [0.213]
Govex 0.008*** 0.006* 0.008** 0.008 0.006 0.008 0.007*** 0.004 0.005 0.007 0.004 0.005
[0.002] [0.003] [0.004] [0.005] [0.006] [0.008] [0.002] [0.003] [0.003] [0.005] [0.005] [0.007]
Trade ¡0.173*** ¡0.118*** ¡0.161*** ¡0.173** ¡0.118 ¡0.161* ¡0.099*** ¡0.082*** ¡0.092*** ¡0.099** ¡0.082* ¡0.092**
[0.030] [0.036] [0.040] [0.084] [0.081] [0.088] [0.012] [0.016] [0.015] [0.045] [0.046] [0.041]
FDI 0.005** 0.006** 0.007** 0.005 0.006 0.007 0.005*** 0.007*** 0.004* 0.005 0.007* 0.004
[0.002] [0.002] [0.003] [0.004] [0.005] [0.008] [0.002] [0.002] [0.002] [0.004] [0.004] [0.007]
INST 0.210*** 0.616*** 0.516*** 0.210** 0.616 0.516 0.137*** 0.617*** 0.616*** 0.137 0.617* 0.616*
[0.022] [0.117] [0.117] [0.095] [0.387] [0.396] [0.015] [0.112] [0.091] [0.083] [0.347] [0.358]
INSTnew*Trade ¡0.091*** ¡0.069** ¡0.091 ¡0.069 ¡0.087*** ¡0.087*** ¡0.087 ¡0.087
[0.027] [0.029] [0.078] [0.085] [0.021] [0.016] [0.056] [0.060]
147
INSTnew*FDI 0.002 0.002 0.003 0.003

[0.004] [0.012] [0.003] [0.009]
Trade ¡0.947*** ¡0.672*** ¡0.858*** ¡0.947*** ¡0.672* ¡0.858*** ¡0.720*** ¡0.521*** ¡0.537*** ¡0.720** ¡0.521** ¡0.537**
[0.141] [0.177] [0.167] [0.358] [0.397] [0.324] [0.082] [0.102] [0.088] [0.349] [0.262] [0.236]
FDI 0.029** 0.032** 0.036** 0.029 0.032 0.036 0.038*** 0.045*** 0.023* 0.038 0.045* 0.023
[0.012] [0.014] [0.014] [0.025] [0.027] [0.045] [0.015] [0.015] [0.012] [0.030] [0.027] [0.042]
INST 1.151*** 3.518*** 2.748*** 1.151*** 3.518* 2.748 1.002*** 3.918*** 3.583*** 1.002*** 3.918*** 3.583***
[0.110] [0.731] [0.691] [0.323] [1.890] [1.754] [0.115] [0.691] [0.484] [0.382] [1.452] [1.133]
INSTnew*Trade ¡0.520*** ¡0.368** ¡0.520 ¡0.368 ¡0.550*** ¡0.503*** ¡0.550** ¡0.503**
[0.163] [0.165] [0.417] [0.411] [0.131] [0.088] [0.274] [0.224]
INSTnew*FDI 0.011 0.011 0.017 0.017
[0.020] [0.061] [0.018] [0.051]

N 1098 892 1098 1098 892 892 1098 892 892 1098 892 892
No. of IVs 59 53 54 59 53 54 59 53 54 59 53 54
Countries 83 83 83 83 83 83 83 83 83 83 83 83
AR(2) test 0.898 0.966 0.963 0.899 0.966 0.963 0.888 0.973 0.982 0.889 0.973 0.982
(p-value)
Hansen test 0.633 0.586 0.429 0.633 0.586 0.429 0.496 0.530 0.415 0.496 0.530 0.415
(p-value)
Note: *, **, *** are significant levels at 10%, 5%, and 1%, respectively. INSTnew is the average of six indicators from World Governance Indicators (World Bank, 2015). Standard errors are reported in [ ]. The number in bold are
statistically significant.
Table A7
Pesaran (2007) panel unit root test and Pesaran's CD-test for cross-sectional dependence.
Variable CD-test p-value Corr Abs (corr) CIPS test Critical values at 10% Critical values at 5% Critical values at 1%
GDPpc 202.92*** 0.000 0.80 0.82 1.949 2.11 2.2 2.36

Cap 217.2*** 0.000 0.85 0.91 1.418 2.11 2.2 2.36
Hc 216.93*** 0.000 0.85 0.91 0.762 2.11 2.2 2.36
Govex 23.696*** 0.000 0.09 0.39 1.619 2.11 2.2 2.36
Trade 73.896*** 0.000 0.29 0.51 1.635 2.11 2.2 2.36
FDI 35.574*** 0.000 0.14 0.27 N/A
Concor 3.539*** 0.000 0.02 0.36 N/A
Goveff 1.81* 0.070 0.01 0.40 N/A
Politic 5.811*** 0.000 0.02 0.35 N/A
Requa 1.425 0.154 0.01 0.35 N/A
Law 16.454*** 0.000 0.07 0.41 N/A
Voice 5.711*** 0.000 0.02 0.39 N/A
Notes: For the CD test, under the null hypothesis of cross-section independence, CD ~ N(0,1); p-values close to zero indicate data are correlated across panel groups. For
CIPS test, H0 (homogeneous non-stationary): bi ¼ 0 for all i (FDI and six institutional indicators can not be tested due to the unbalanced nature of data). *, **, *** are
significant levels at 10%, 5%, 1%, respectively.
148
N. Phuc Canh et al.
Table A8
Economic Integration and Innovations (Pool OLS, FEM, REM, and GFLS).
Dep. Var: Basic model Trade FDI

patent
Pool OLS Pool OLS FEM REM FGLS Pool OLS Pool OLS FEM REM FGLS Pool OLS Pool OLS FEM REM FGLS
GDPpc ¡0.235*** 0.368*** 0.020 0.126 ¡0.235*** ¡0.208*** 0.383*** 0.017 0.126 ¡0.208*** ¡0.203*** 0.379*** 0.016 0.128 ¡0.203
[0.021] [0.128] [0.117] [0.083] [0.035] [0.035] [0.128] [0.117] [0.083] [0.035] [0.036] [0.129] [0.118] [0.083] [0.036]
Cap 1.144*** 0.737*** 0.481*** 0.602*** 1.144*** 1.081*** 0.740*** 0.481*** 0.601*** 1.081*** 1.081*** 0.742*** 0.489*** 0.602*** 1.081
[0.021] [0.064] [0.056] [0.042] [0.021] [0.023] [0.064] [0.056] [0.042] [0.022] [0.023] [0.064] [0.056] [0.042] [0.023]
Hc 1.438*** 1.522*** 0.577*** 0.484*** 1.438*** 1.567*** 1.475*** 0.554*** 0.610*** 1.567*** 1.561*** 1.430*** 0.523*** 0.588*** 1.561
[0.074] [0.216] [0.177] [0.149] [0.074] [0.076] [0.218] [0.184] [0.156] [0.076] [0.077] [0.219] [0.184] [0.157] [0.077]
Govex 0.059*** ¡0.011 ¡0.029*** ¡0.014 0.059*** 0.055*** ¡0.011 ¡0.029*** ¡0.015* 0.055*** 0.054*** ¡0.011 ¡0.029 ¡0.015* 0.054
[0.007] [0.009] [0.009] [0.009] [0.007] [0.007] [0.009] [0.009] [0.009] [0.007] [0.007] [0.009] [0.009] [0.009] [0.007]
Trade ¡0.428*** 0.157 0.043 ¡0.234*** ¡0.429*** ¡0.419*** 0.148 0.034 ¡0.236*** ¡0.419
[0.066] [0.098] [0.094] [0.090] [0.066] [0.073] [0.098] [0.095] [0.091] [0.073]
FDI ¡0.0004 0.0003 0.001 0.0002 ¡0.0004
[0.005] [0.003] [0.003] [0.003] [0.005]
Const ¡12.06*** ¡10.88*** [1.396] ¡1.598** ¡4.360*** ¡12.06*** ¡9.880*** ¡11.46*** [1.440] ¡1.694** ¡3.663*** ¡9.880*** ¡9.930*** ¡11.28*** ¡1.660** ¡3.641*** ¡9.930
[0.276] [0.743] [0.585] [0.276] [0.431] [0.771] [0.643] [0.430] [0.453] (1.447) [0.778] [0.651] [0.452]
Year effect Yes Yes Yes
Country effect Yes Yes Yes
N 1429 1429 1429 1429 1429 1429 1429 1429 1429 1429 1420 1420 1420 1420 1420
149
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 1235*** 347.6*** 97.32*** 618.0*** 4956*** 1025*** 344.71*** 77.85*** 628.8*** 5146*** 849.0*** 340.6*** 64.18*** 620.8*** 5119***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.776 0.965 0.225 0.222 0.783 0.965 0.225 0.219 0.783 0.965 0.224 0.218
R2-adj/R2- 0.775 0.962 0.779 0.787 0.782 0.962 0.775 0.796 0.782 0.962 0.773 0.795
between
R-overall 0.729 0.738 0.724 0.750 0.723 0.750
Hettest 0.93 242.9*** 2.51 241.9*** 2.43 239.9***
(0.334) (0.000) (0.113) (0.000) (0.119) (0.000)
Corr(u_i, Xb) 0.700 0(assumed) 0.698 0(assumed) 0.696 0(assumed)
Rho 0.931 0.816 0.932 .814 0.932 0.818
F-test all u_i ¼ 0 81.88*** 78.99*** 78.93***
(0.000) (0.000) (0.000)
Hausman test 291.3*** 8166*** 839.9***
(0.000) (0.000) (0.000)

Modified Wald test for groupwise heteroskedasticity 35100*** 56411*** 56525***
(0.000) (0.000) (0.000)
Note: R2 & R2-adj are reported for Pool OLS; R2-within, R2-between, R2-overall are reported for FEM and REM. F-test is reported for Pool OLS, FEM, REM. Wald chi2 test is reported for FGLS. P-value is reported in (). Standard errors
are reported in []. Hausman test is used to test between FEM and REM. Standard errors are reported in []. Hettest is Breusch-Pagan/Cook-Weisberg test. The number in bold are statistically significant.
N. Phuc Canh et al.
Table A9
Institutions, Economic Integration and Innovations: Control of Corruption, Government effectiveness, Political stability (Pool OLS, FEM, REM, and GFLS).
Dep. Var: patent Concor Goveff Politic
GDPpc ¡0.470*** 0.400*** 0.051 0.037 ¡0.470*** ¡0.545*** 0.343** ¡0.039 ¡0.081 ¡0.545*** ¡0.419*** 0.574*** 0.190 0.252*** ¡0.419***
[0.056] [0.145] [0.131] [0.098] [0.056] [0.060] [0.155] [0.140] [0.106] [0.059] [0.047] [0.146] [0.132] [0.094] [0.047]
Cap 1.133*** 0.771*** 0.506*** 0.653*** 1.133*** 1.108*** 0.773*** 0.525*** 0.671*** 1.108*** 1.153*** 0.747*** 0.474*** 0.598*** 1.153***
[0.024] [0.070] [0.060] [0.045] [0.024] [0.024] [0.070] [0.061] [0.046] [0.024] [0.025] [0.070] [0.060] [0.046] [0.025]
Hc 1.532*** 1.239*** 0.451** 0.589*** 1.532*** 1.517*** 1.253*** 0.469** 0.587*** 1.517*** 1.437*** 1.149*** 0.298 0.467*** 1.437***
[0.083] [0.234] [0.200] [0.167] [0.083] [0.082] [0.233] [0.198] [0.165] [0.082] [0.082] [0.231] [0.198] [0.166] [0.082]
Govex 0.057*** ¡0.014 ¡0.032*** ¡0.016* 0.057*** 0.058*** ¡0.013 ¡0.030*** ¡0.013 0.058*** 0.057*** ¡0.016 ¡0.035*** ¡0.016* 0.057***
[0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008]
Trade ¡0.405*** 0.034 ¡0.082 ¡0.326*** ¡0.405*** ¡0.514*** 0.032 ¡0.078 ¡0.325*** ¡0.514*** ¡0.503*** 0.019 ¡0.110 ¡0.349*** ¡0.503***
[0.079] [0.107] [0.102] [0.098] [0.079] [0.081] [0.107] [0.102] [0.097] [0.080] [0.080] [0.106] [0.101] [0.098] [0.080]
FDI ¡0.005 ¡0.0002 0.001 0.0002 ¡0.005 ¡0.002 ¡0.0001 0.001 0.001 ¡0.002 ¡0.003 ¡0.001 0.0004 0.0003 ¡0.003
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
Inst 0.365*** ¡0.031 0.051 0.228*** 0.365*** 0.553*** 0.072 0.183* 0.394*** 0.553*** 0.426*** ¡0.255 ¡0.225*** ¡0.126** 0.426***
[0.057] [0.079] [0.080] [0.074] [0.057] [0.076] [0.098] [0.097] [0.094] [0.076] [0.056] [0.053] [0.053] [0.054] [0.056]
Const ¡8.426*** ¡10.97*** ¡1.498* ¡3.173*** ¡8.426*** ¡7.068*** ¡10.51*** ¡1.116 ¡2.515*** ¡7.068*** ¡8.376*** ¡11.861*** ¡1.711** ¡3.857*** ¡8.376***
150
[0.570] [1.613] [0.868] [0.722] [0.568] [0.658] [1.660] [0.892] [0.753] [0.656] [0.549] [1.587] [0.863] [0.709] [0.547]
N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald chi2 test 652.8*** 322.3*** 45.13*** 570.8*** 4600*** 660.9*** 322.4*** 45.71*** 582.8*** 4657*** 663.6*** 329.3*** 48.33*** 563.6*** 4676***
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.792 0.968 0.220 0.213 0.794 0.968 0.223 0.216 0.795 0.969 0.232 0.223
R2-adj/R2-between 0.791 0.965 0.767 0.792 0.793 0.965 0.776 0.801 0.794 0.966 0.694 0.762
R-overall 0.726 0.750 0.734 0.759 0.652 0.724
Hettest 3.32* 218.2*** 5.88** 216.2*** 6.54** 224.1***
(0.068) (0.000) (0.015) (0.000) (0.011) (0.000)
Rho 0.935 0.829 0.933 0.829 0.941 0.940 0.829
F-test all u_i ¼ 0 70.90***(0.000) 70.31***(0.000) 71.11***(0.000)

Hausman tests 176.3***(0.000) 156.82***(0.000) 557.36***(0.000)
Modified Wald test for groupwise heteroskedasticity 69631*** 1.2eþ05*** 34546***
(0.000) (0.000) (0.000)
N. Phuc Canh et al.
Table A10
Institutions, Economic Integration and Innovations: Regulatory quality, Law, Voice and Accountability (Pool OLS, FEM, REM, and GFLS).
Dep. Var: Requa Law Voice

patent
GDPpc ¡0.272*** 0.460*** 0.124 0.185* ¡0.272*** ¡0.453*** 0.444*** 0.099 0.137 ¡0.453*** ¡0.166*** 0.405*** 0.072 0.159* ¡0.166***
[0.056] [0.146] [0.133] [0.099] [0.056] [0.055] [0.144] [0.131] [0.099] [0.055] [0.047] [0.142] [0.129] [0.093] [0.047]
Cap 1.112*** 0.762*** 0.497*** 0.617*** 1.112*** 1.114*** 0.776*** 0.507*** 0.628*** 1.114*** 1.097*** 0.759*** 0.493*** 0.624*** 1.097***
[0.025] [0.070] [0.060] [0.046] [0.025] [0.024] [0.070] [0.060] [0.045] [0.024] [0.025] [0.070] [0.061] [0.046] [0.025]
Hc 1.484*** 1.221*** 0.395** 0.503*** 1.484*** 1.489*** 1.240*** 0.416** 0.513*** 1.489*** 1.528*** 1.270*** 0.439** 0.501*** 1.528***
[0.085] [0.233] [0.198] [0.166] [0.084] [0.083] [0.233] [0.197] [0.165] [0.082] [0.086] [0.233] [0.197] [0.166] [0.085]
Govex 0.059*** ¡0.014 ¡0.032*** ¡0.016 0.059*** 0.055*** ¡0.015 ¡0.033*** ¡0.015 0.055*** 0.062*** ¡0.013 ¡0.032*** ¡0.016* 0.062***
[0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008]
Trade ¡0.415*** 0.030 ¡0.089 ¡0.331*** ¡0.415*** ¡0.457*** 0.022 ¡0.097 ¡0.331*** ¡0.457*** ¡0.422*** 0.036 ¡0.081 ¡0.327*** ¡0.422***
[0.082] [0.106] [0.102] [0.098] [0.081] [0.080] [0.107] [0.102] [0.098] [0.080] [0.082] [0.106] [0.102] [0.098] [0.082]
FDI ¡0.001 ¡0.00002 0.001 0.0005 ¡0.001 ¡0.002 ¡0.00003 0.001 0.0004 ¡0.002 0.0002 ¡0.0002 0.001 0.0004 0.0002
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
Inst 0.118 ¡0.169 ¡0.159* ¡0.026 0.118 0.410*** ¡0.194** ¡0.155 0.071 0.410*** ¡0.103*** ¡0.178 ¡0.149* 0.039 ¡0.103*
[0.079] [0.086] [0.088] [0.086] [0.079] [0.067] [0.098] [0.098] [0.092] [0.066] [0.059] [0.084] [0.085] [0.079] [0.059]
Const ¡9.733*** ¡11.39*** ¡1.757** ¡3.692*** ¡9.733*** ¡7.961*** ¡11.488*** ¡1.688* ¡3.475*** ¡7.961*** ¡10.54*** ¡10.880*** ¡10.880*** ¡3.584*** ¡10.54***
[0.620] [1.610] [0.878] [0.740] [0.618] [0.619] [1.618] [0.875] [0.751] [0.617] [0.519] [1.587] [1.587] [0.714] [0.518]
151

N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 627.1*** 323.3*** (0.000) 45.66*** 547.4*** 4419*** 650.8*** 323.4*** 45.51*** 556.9*** 4586*** 627.7*** 323.6*** 45.62*** 547.4*** 4423***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.785 0.968 0.222 0.215 0.792 0.968 0.222 0.213 0.786 0.968 0.222 0.214
R2-adj/R2- 0.784 0.965 0.742 0.780 0.790 0.965 0.727 0.786 0.784 0.965 0.737 0.781
between
R-overall 0.702 0.742 0.686 0.747 0.696 0.742
Hettest 2.60 225.54*** 4.28** 236.5*** 2.28 232.3***
(0.107) (0.000) (0.039) (0.000) (0.131) (0.000)
Rho 0.938 0.835 0.939 0.829 0.939 0.835
F-test all u_i ¼ 0

73.84***(0.000) 71.26***(0.000) 73.76***(0.000)
Hausman tests 333.2***(0.000) 283.9***(0.000) 337.38***(0.000)
Modified Wald test for groupwise heteroskedasticity 40054*** 2.0eþ05*** 33714***
(0.000) (0.000) (0.000)
N. Phuc Canh et al.
Table A11
Institutions and Innovations: Control of Corruption, Government effectiveness, Political stability and the associations with trade openness (Pool OLS, FEM, REM, and GFLS).
Dep. Var: Concor Goveff Politic

patent
GDPpc ¡0.456*** 0.385*** 0.057 0.065 ¡0.456*** ¡0.516*** 0.291* ¡0.025 ¡0.046 ¡0.516*** ¡0.397*** 0.566*** 0.191 0.262*** ¡0.397***
[0.057] [0.145] [0.131] [0.098] [0.057] [0.061] [0.155] [0.139] [0.105] [0.061] [0.049] [0.146] [0.132] [0.094] [0.049]
Cap 1.135*** 0.768*** 0.525*** 0.666*** 1.135*** 1.110*** 0.761*** 0.550*** 0.689*** 1.110*** 1.153*** 0.749*** 0.489*** 0.614*** 1.153***
[0.025] [0.070] [0.061] [0.045] [0.024] [0.024] [0.070] [0.061] [0.045] [0.024] [0.025] [0.070] [0.061] [0.046] [0.025]
Hc 1.490*** 1.204*** 0.445** 0.552*** 1.490*** 1.445*** 1.196*** 0.535*** 0.591*** 1.445*** 1.402*** 1.138*** 0.311 0.472*** 1.402***
[0.090] [0.236] [0.199] [0.166] [0.089] [0.090] [0.233] [0.196] [0.163] [0.089] [0.086] [0.232] [0.198] [0.166] [0.086]
Govex 0.055*** ¡0.014 ¡0.031*** ¡0.016* 0.055*** 0.054*** ¡0.016 ¡0.032*** ¡0.017* 0.054*** 0.055*** ¡0.017 ¡0.036*** ¡0.020** 0.055***
[0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008]
Trade ¡0.351*** 0.027 ¡0.080 ¡0.280*** ¡0.351*** ¡0.391*** 0.054 ¡0.008 ¡0.170* ¡0.391*** ¡0.471*** 0.006 ¡0.141 ¡0.378*** ¡0.471***
[0.091] [0.107] [0.101] [0.098] [0.090] [0.101] [0.106] [0.102] [0.099] [0.101] [0.083] [0.108] [0.102] [0.098] [0.083]
FDI ¡0.003 ¡0.0001 0.001 0.001 ¡0.003 0.0004 ¡0.00004 0.001 0.001 0.0004 ¡0.001 ¡0.0005 0.001 0.0005 ¡0.001
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
Inst 0.706** 0.324 1.044*** 1.554*** 0.706** 1.181*** 1.329*** 2.032*** 2.595*** 1.181*** 0.863*** ¡0.074 0.348 0.930*** 0.863***
[0.283] [0.369] [0.356] [0.338] [0.282] [0.321] [0.404] [0.388] [0.366] [0.320] [0.314] [0.316] [0.313] [0.311] [0.313]
Inst*trade ¡0.079 ¡0.083 ¡0.234*** ¡0.312*** ¡0.079 ¡0.147*** ¡0.288*** ¡0.429*** ¡0.513*** ¡0.147*** ¡0.107 ¡0.042 ¡0.135* ¡0.249*** ¡0.107
[0.064] [0.084] [0.082] [0.077] [0.064] [0.073] [0.090] [0.087] [0.082] [0.073] [0.076] [0.073] [0.073] [0.072] [0.075]
¡8.67*** ¡10.7*** ¡1.796** ¡3.664*** ¡8.666*** ¡7.612*** ¡9.809*** ¡1.992** ¡3.628*** ¡7.612*** ¡8.552*** ¡11.74*** ¡1.771** ¡3.965*** ¡8.552***
152
Const
[0.603] [1.643] [0.872] [0.729] [0.600] [0.711] [1.668] [0.900] [0.765] [0.708] [0.562] [1.601] [0.863] [0.708] [0.560]
N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 571.6*** 319.2*** 40.77*** 590.5*** 4607*** 580.2*** 322.1*** 43.86*** 632.4*** 4677*** 581.4*** 325.9*** 42.82*** 578.8*** 4686***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.792 0.968 0.226 0.220 0.795 0.968 0.239 0.234 0.795 0.969 0.235 0.226
R2-adj/R2- 0.791 0.965 0.773 0.790 0.793 0.965 0.780 0.793 0.794 0.966 0.705 0.765
between
R-overall 0.739 0.754 0.750 0.761 0.666 0.731
Hettest 3.96** 221.4*** 7.22*** 224.6*** 7.88*** 226.7***
(0.047) (0.000) (0.007) (0.000) (0.005) (0.000)

Rho 0.932 0.831 0.927 0.833 0.939 0.831
F-test all u_i ¼ 0 71.35***(0.000) 71.79***(0.000) 71.17***(0.000)
Hausman tests 14.26*(0.075) 56.45***(0.000) 351.76***(0.000)
Modified Wald test for groupwise heteroskedasticity 1.0eþ05*** 88334*** 34358***
(0.000) (0.000) (0.000)
N. Phuc Canh et al.
Table A12
Institutions and Innovations: Regulatory quality, Rule of Law, Voice and accountability and the associations with trade openness (Pool OLS, FEM, REM, and GFLS).

patent
GDPpc ¡0.264*** 0.449*** 0.205 0.280*** ¡0.264*** ¡0.410*** 0.415*** 0.100 0.132 ¡0.410*** ¡0.160*** 0.389*** 0.112 0.175* ¡0.160***
[0.058] [0.144] [0.131] [0.098] [0.058] [0.057] [0.145] [0.130] [0.098] [0.057] [0.047] [0.142] [0.128] [0.092] [0.047]
Cap 1.113*** 0.712*** 0.501*** 0.613*** 1.113*** 1.116*** 0.768*** 0.524*** 0.651*** 1.116*** 1.094*** 0.736*** 0.509*** 0.637*** 1.094***
[0.025] [0.070] [0.059] [0.045] [0.025] [0.024] [0.070] [0.060] [0.045] [0.024] [0.025] [0.070] [0.060] [0.046] [0.025]
Hc 1.468*** 1.118*** 0.492** 0.518*** 1.468*** 1.401*** 1.197*** 0.457** 0.511*** 1.401*** 1.504*** 1.162*** 0.442** 0.494*** 1.504***
[0.090] [0.231] [0.194] [0.163] [0.090] [0.089] [0.233] [0.196] [0.164] [0.089] [0.087] [0.236] [0.195] [0.165] [0.087]
Govex 0.058*** ¡0.018* ¡0.032*** ¡0.018* 0.058*** 0.051*** ¡0.016 ¡0.033*** ¡0.017* 0.051*** 0.063*** ¡0.015 ¡0.032*** ¡0.017* 0.063***
[0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.009] [0.008]
Trade ¡0.384*** 0.081 0.015 ¡0.148 ¡0.384*** ¡0.338*** 0.029 ¡0.058 ¡0.229** ¡0.338*** ¡0.399*** 0.028 ¡0.068 ¡0.279*** ¡0.399***
[0.101] [0.106] [0.101] [0.099] [0.100] [0.092] [0.107] [0.102] [0.099] [0.092] [0.084] [0.106] [0.101] [0.097] [0.084]
FDI ¡0.001 0.001 0.002 0.002 ¡0.001 0.001 0.0003 0.001 0.001 0.001 0.001 0.00005 0.001 0.001 0.001
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
Inst 0.280 1.756*** 2.344*** 2.529*** 0.280 1.211*** 0.538 1.252*** 2.007*** 1.211*** 0.357 0.844** 1.642*** 2.090*** 0.357
[0.321] [0.374] [0.362] [0.350] [0.320] [0.313] [0.396] [0.385] [0.365] [0.312] [0.342] [0.397] [0.377] [0.368] [0.341]
Inst*trade ¡0.039 ¡0.469*** ¡0.611*** ¡0.623*** ¡0.039 ¡0.191*** ¡0.162* ¡0.312*** ¡0.437*** ¡0.191*** ¡0.107 ¡0.231*** ¡0.405*** ¡0.470*** ¡0.107
[0.074] [0.089] [0.086] [0.083] [0.074] [0.073] [0.085] [0.083] [0.080] [0.073] [0.078] [0.088] [0.083] [0.082] [0.078]
Const ¡9.880*** ¡10.41*** ¡3.095*** ¡5.137*** ¡9.880*** ¡8.567*** ¡10.94*** ¡2.212** ¡4.116*** ¡8.567*** ¡10.60*** ¡10.17*** ¡2.072** ¡4.063*** ¡10.60***
153
[0.681] [1.602] [0.880] [0.753] [0.679] [0.660] [1.642] [0.881] [0.753] [0.657] [0.521] [1.606] [0.871] [0.713] [0.519]
N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 548.4*** 328.4*** 48.07*** 619.8*** 4420*** 573.1*** 321.1*** 42.08*** 595.2*** 4619*** 549.8*** 322.3*** 43.69*** 587.8*** 4432***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.785 0.969 0.256 0.250 0.793 0.968 0.232 0.225 0.786 0.969 0.238 0.232
R2-adj/R2- 0.784 0.966 0.707 0.747 0.791 0.965 0.756 0.786 0.784 0.966 0.732 0.763
between
R-overall 0.682 0.721 0.726 0.755 0.704 0.732
Hettest 2.80* 243.1*** 5.38** 238.8*** 2.25 229.1***
(0.094) (0.000) (0.020) (0.000) (0.133) (0.000)

Rho 0.936 0.842 0.934 0.833 0.936 0.840
F-test all u_i ¼ 0 77.72***(0.000) 71.79***(0.000) 75.41***(0.000)
Hausman tests 173.23***(0.000) 222.60***(0.000) 61.26***(0.000)
Modified Wald test for groupwise heteroskedasticity 45408*** 99231*** 54310***
(0.000) (0.000) (0.000)
N. Phuc Canh et al.
Table A13
Institutions and Innovations: Control of Corruption, Government effectiveness, Political stability and the associations with trade openness and FDI (Pool OLS, FEM, REM, and GFLS).
Dep. Var: Concor Goveff Politic

patent
GDPpc ¡0.453*** 0.383*** 0.053 0.064 ¡0.453*** ¡0.510*** 0.291* ¡0.024 ¡0.045 ¡0.510*** ¡0.401*** 0.566*** 0.194 0.263*** ¡0.401***
[0.057] [0.145] [0.131] [0.097] [0.057] [0.061] [0.156] [0.139] [0.105] [0.061] [0.050] [0.146] [0.132] [0.094] [0.050]
Cap 1.144*** 0.768*** 0.525*** 0.667*** 1.144*** 1.117*** 0.761*** 0.550*** 0.691*** 1.117*** 1.151*** 0.750*** 0.492*** 0.616*** 1.151***
[0.025] [0.070] [0.061] [0.045] [0.025] [0.024] [0.070] [0.061] [0.045] [0.024] [0.025] [0.070] [0.061] [0.046] [0.025]
Hc 1.489*** 1.218*** 0.455** 0.558*** 1.489*** 1.446*** 1.202*** 0.534*** 0.587*** 1.446*** 1.407*** 1.131*** 0.300 0.460*** 1.407***
[0.089] [0.237] [0.200] [0.166] [0.089] [0.089] [0.234] [0.197] [0.164] [0.089] [0.087] [0.233] [0.199] [0.166] [0.086]
Govex 0.053*** ¡0.015 ¡0.032*** ¡0.016* 0.053*** 0.052*** ¡0.016 ¡0.031*** ¡0.016* 0.052*** 0.056*** ¡0.016 ¡0.036*** ¡0.019** 0.056***
[0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008]
Trade ¡0.373*** 0.018 ¡0.090 ¡0.287*** ¡0.373*** ¡0.422*** 0.050 ¡0.007 ¡0.163 ¡0.422*** ¡0.474*** 0.008 ¡0.135 ¡0.367*** ¡0.474***
[0.091] [0.107] [0.102] [0.098] [0.091] [0.102] [0.108] [0.103] [0.101] [0.101] [0.083] [0.108] [0.103] [0.098] [0.083]
FDI 0.012 0.003 0.004 0.002 0.012 0.015* 0.001 0.001 ¡0.0001 0.015* ¡0.004 ¡0.002 ¡0.001 ¡0.003 ¡0.004
[0.008] [0.004] [0.004] [0.004] [0.008] [0.009] [0.005] [0.005] [0.005] [0.009] [0.008] [0.004] [0.004] [0.005] [0.008]
Inst 0.488* 0.274 1.006*** 1.532*** 0.488* 0.952*** 1.307*** 2.038*** 2.628*** 0.952*** 0.896*** ¡0.053 0.379 0.975*** 0.896***
[0.295] [0.373] [0.359] [0.341] [0.294] [0.337] [0.414] [0.395] [0.374] [0.335] [0.320] [0.321] [0.317] [0.315] [0.319]
Inst*Trade ¡0.016 ¡0.069 ¡0.224*** ¡0.305*** ¡0.016 ¡0.081 ¡0.282*** ¡0.430*** ¡0.522*** ¡0.081 ¡0.118 ¡0.048 ¡0.144* ¡0.263*** ¡0.118
[0.069] [0.085] [0.083] [0.079] [0.068] [0.078] [0.093] [0.090] [0.085] [0.078] [0.078] [0.075] [0.074] [0.074] [0.078]
Inst*FDI ¡0.014*** ¡0.003 ¡0.002 ¡0.001 ¡0.014*** ¡0.014** ¡0.001 0.0002 0.001 ¡0.014** 0.005 0.002 0.003 0.005 0.005
[0.005] [0.003] [0.003] [0.003] [0.005] [0.006] [0.003] [0.003] [0.003] [0.006] [0.009] [0.005] [0.005] [0.005] [0.009]
Const ¡8.733*** ¡10.65*** ¡1.729** ¡3.644*** ¡8.733*** ¡7.644*** ¡9.801*** ¡2.002** ¡3.675*** ¡7.644*** ¡8.498*** ¡11.75*** ¡1.830** ¡4.011*** ¡8.498***
154
[0.602] [1.643] [0.876] [0.731] [0.599] [0.710] [1.669] [0.912] [0.773] [0.707] [0.571] [1.602] [0.869] [0.711] [0.569]
N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 511.2*** 316.2*** 36.29*** 592.8*** 4639*** 518*** 318.8*** 38.95*** 633.7*** 4701*** 516.5*** 322.6*** 38.08*** 577*** 4687***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.793 0.968 0.226 0.220 0.796 0.968 0.239 0.234 0.795 0.969 0.235 0.226
R2-adj/R2- 0.791 0.965 0.773 0.790 0.794 0.965 0.780 0.793 0.794 0.966 0.704 0.765
between
R-overall 0.739 0.755 0.750 0.761 0.665 0.730
Hettest 4.84** 220.2*** 8.61*** 224.3*** 7.57*** 226.6***
(0.028) (0.000) (0.003) (0.000) (0.006) (0.000)
Rho 0.932 0.830 0.927 0.832 0.939 0.833

F-test all u_i ¼ 0 70.86***(0.000) 71.37***(0.000) 71.11***(0.000)
Hausman tests 20.57**(0.015) 55.84***(0.000) 318.46***(0.000)
Modified Wald test for groupwise heteroskedasticity 1.1eþ05*** 97561*** 33836***
(0.000) (0.000) (0.000)
N. Phuc Canh et al.
Table A14
Institutions and Innovations: Regulatory quality, Rule of Law, Voice and accountability and the associations with trade openness and FDI (Pool OLS, FEM, REM, and GFLS).

patent
GDPpc ¡0.256*** 0.449*** 0.205 0.279*** ¡0.256*** ¡0.407*** 0.415*** 0.102 0.133 ¡0.407*** ¡0.167*** 0.389*** 0.115 0.176* ¡0.167***
[0.058] [0.144] [0.131] [0.098] [0.058] [0.057] [0.145] [0.131] [0.098] [0.057] [0.047] [0.142] [0.128] [0.092] [0.047]
Cap 1.120*** 0.711*** 0.500*** 0.615*** 1.120*** 1.123*** 0.767*** 0.525*** 0.652*** 1.123*** 1.101*** 0.736*** 0.509*** 0.639*** 1.101***
[0.025] [0.070] [0.059] [0.045] [0.025] [0.024] [0.070] [0.060] [0.045] [0.024] [0.025] [0.070] [0.060] [0.046] [0.025]
Hc 1.470*** 1.124*** 0.493** 0.516*** 1.470*** 1.400*** 1.200*** 0.454** 0.505*** 1.400*** 1.501*** 1.160*** 0.440** 0.493*** 1.501***
[0.090] [0.232] [0.194] [0.164] [0.089] [0.089] [0.235] [0.197] [0.164] [0.089] [0.087] [0.236] [0.195] [0.164] [0.087]
Govex 0.055*** ¡0.018* ¡0.033*** ¡0.018* 0.055*** 0.049*** ¡0.016 ¡0.032*** ¡0.016* 0.049*** 0.064*** ¡0.015 ¡0.031*** ¡0.016* 0.064***
[0.008] [0.010] [0.010] [0.009] [0.008] [0.008] [0.010] [0.010] [0.010] [0.008] [0.008] [0.010] [0.010] [0.009] [0.008]
Trade ¡0.426*** 0.076 0.014 ¡0.143 ¡0.426*** ¡0.360*** 0.028 ¡0.055 ¡0.222** ¡0.360*** ¡0.444*** 0.032 ¡0.059 ¡0.269*** ¡0.444***
[0.102] [0.107] [0.103] [0.101] [0.101] [0.092] [0.107] [0.103] [0.100] [0.092] [0.086] [0.107] [0.102] [0.098] [0.085]
FDI 0.020 0.002 0.002 0.0001 0.020* 0.015* 0.001 0.001 ¡0.0003 0.015* 0.015* ¡0.001 ¡0.001 ¡0.002 0.015*
[0.010]* [0.005] [0.005] [0.006] [0.010] [0.008] [0.005] [0.005] [0.005] [0.008] [0.008] [0.004] [0.004] [0.005] [0.008]
Inst ¡0.005 1.734*** 2.339*** 2.552*** ¡0.005 1.006*** 0.527 1.267*** 2.044*** 1.006*** 0.112 0.865** 1.675*** 2.140*** 0.112
[0.340] [0.381] [0.368] [0.357] [0.339] [0.326] [0.405] [0.393] [0.373] [0.324] [0.355] [0.402] [0.382] [0.373] [0.354]
Inst*Trade 0.043 ¡0.463*** ¡0.610*** ¡0.629*** 0.043 ¡0.131* ¡0.159* ¡0.316*** ¡0.447*** ¡0.131* ¡0.032 ¡0.237*** ¡0.415*** ¡0.485*** ¡0.032
[0.081] [0.091] [0.088] [0.085] [0.081] [0.078] [0.088] [0.085] [0.082] [0.078] [0.084] [0.089] [0.085] [0.084] [0.083]
Inst*FDI ¡0.018** ¡0.001 ¡0.0002 0.001 ¡0.018** ¡0.014** ¡0.0004 0.001 0.002 ¡0.014** ¡0.017** 0.001 0.002 0.003 ¡0.017**
[0.007] [0.004] [0.004] [0.004] [0.007] [0.006] [0.003] [0.003] [0.003] [0.006] [0.007] [0.004] [0.004] [0.004] [0.007]
155
Const ¡9.907*** ¡10.40*** ¡3.088*** ¡5.176*** ¡9.907*** ¡8.603*** ¡10.94*** ¡2.236** ¡4.164*** ¡8.603*** ¡10.51*** ¡10.18*** ¡2.129** ¡4.143*** ¡10.51***
[0.680] [1.603] [0.887] [0.756] [0.677] [0.659] [1.643] [0.890] [0.759] [0.656] [0.521] [1.607] [0.877] [0.716] [0.519]
N 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208 1208
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
F-test/Wald 490.3*** 325.0*** 42.69*** 622.3*** 4449*** 511.8*** 317.8*** 37.38*** 596.1*** 4644*** 491.6*** 319.0*** 38.85*** 593*** 4461***
chi2 test (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.787 0.969 0.256 0.250 0.794 0.968 0.232 0.225 0.787 0.969 0.239 0.231
R2-adj/R2- 0.785 0.966 0.707 0.748 0.792 0.965 0.756 0.785 0.785 0.965 0.732 0.763
between
R-overall 0.682 0.721 0.726 0.755 0.705 0.732
Hettest 3.94** 242.9*** 6.92*** 238.7*** 3.21*** 229.5***
(0.047) (0.000) (0.009) (0.000) (0.073) (0.000)

Rho 0.936 0.840 0.934 0.832 0.936 0.837
F-test all u_i ¼ 0 77.19***(0.000) 71.37***(0.000) 74.14***(0.000)
Hausman tests 171.02**(0.000) 227.18***(0.000) 318.46***(0.000)
Modified Wald test for groupwise heteroscedasticity 50974*** 1.1eþ05*** 51829***
(0.000) (0.000) (0.000)
Table A15
Year effects and Country effects from Pool OLS in Table A8–A10.
In models Table A8 Table A9 Table A10
Year effects Basic Trade FDI Cocncor Goveff Politic Requa Law Voice
1997 0.01 0.02 0.01

1998 0.04 0.04 0.04 0.04 0.04 0.04 0.05 0.04 0.04
1999 0.10 0.10 0.10
2000 0.07 0.08 0.08 0.06 0.06 0.07 0.07 0.07 0.06
2001 0.11 0.13 0.12
2002 0.17** 0.18** 0.18** 0.15* 0.15* 0.15* 0.16* 0.16* 0.16*
2003 0.23*** 0.25*** 0.24*** 0.22** 0.21** 0.25*** 0.22*** 0.22*** 0.23***
2004 0.24*** 0.26*** 0.26*** 0.22** 0.21** 0.27*** 0.22** 0.22** 0.21**
2005 0.31*** 0.34*** 0.33*** 0.29*** 0.28*** 0.32*** 0.30*** 0.30*** 0.29***
2006 0.45*** 0.48*** 0.47*** 0.43*** 0.42*** 0.47*** 0.44*** 0.44*** 0.44***
2007 0.50*** 0.54*** 0.53*** 0.49*** 0.47*** 0.53*** 0.49*** 0.50*** 0.49***
2008 0.54*** 0.57*** 0.56*** 0.52*** 0.50*** 0.57*** 0.53*** 0.53*** 0.53***
2009 0.58*** 0.59*** 0.58*** 0.55*** 0.54*** 0.61*** 0.55*** 0.56*** 0.56***
2010 0.59*** 0.62*** 0.61*** 0.57*** 0.55*** 0.62*** 0.57*** 0.58*** 0.58***
2011 0.75*** 0.79*** 0.77*** 0.73*** 0.71*** 0.78*** 0.73*** 0.74*** 0.73***
2012 0.83*** 0.87*** 0.85*** 0.79*** 0.77*** 0.84*** 0.80*** 0.81*** 0.80***
2013 0.81*** 0.84*** 0.82*** 0.78*** 0.76*** 0.82*** 0.78*** 0.79*** 0.78***
2014 0.89*** 0.92*** 0.90*** 0.85*** 0.83*** 0.89*** 0.85*** 0.85*** 0.85***
Country effects
Armenia 1.07*** 0.99*** 1.01*** 1.34*** 1.29*** 1.50*** 1.51*** 1.46*** 1.13***
Australia 1.01*** 1.04*** 1.00*** 0.75** 0.87*** 0.74** 0.53 0.44 0.64*
Austria 0.04 0.14 0.09 0.17 0.05 0.22 0.37 0.53 0.27
Bangladesh 0.30 0.28 0.22 0.02 0.08 0.04 0.06 0.06 0.09
Barbados 2.42*** 2.57*** 2.55*** 2.24*** 2.36*** 2.16*** 2.15*** 1.93*** 2.20***
Belgium 1.02*** 1.27*** 1.31*** 1.03*** 1.13*** 1.04*** 0.86** 0.75** 0.92***
Brazil 1.29*** 1.31*** 1.29*** 1.11*** 1.10*** 1.08*** 1.21*** 1.15*** 1.14***
Brunei Darussalam 1.56*** 1.76*** 1.74*** 1.54*** 1.57*** 1.52*** 1.39*** 1.35*** 1.76***
Bulgaria 0.63*** 0.47*** 0.50** 0.65** 0.61** 0.81*** 0.84*** 0.78*** 0.64**
Cambodia 1.53*** 1.75*** 1.80*** 1.75*** 1.79*** 1.48*** 1.61*** 1.68*** 1.96***
Canada 0.75** 0.87*** 0.81*** 0.52 0.66* 0.47 0.30 0.20 0.41
Chile 0.51*** 0.63*** 0.61*** 0.40 0.53** 0.34* 0.14 0.10 0.35*
China 3.97*** 3.89*** 3.86*** 3.93*** 3.87*** 4.06*** 4.06*** 4.00*** 3.66***
Colombia 0.71*** 0.75*** 0.77*** 0.76*** 0.78*** 1.13*** 0.62*** 0.73*** 0.85***
Croatia 0.17 0.30 0.27 0.10 0.13 0.01 0.02 0.03 0.13
Czech Republic 1.41*** 1.58*** 1.53*** 1.17*** 1.24*** 0.95*** 0.94*** 0.91*** 1.11***
Denmark 0.20 0.36 0.30 0.02 0.14 0.002 0.23 0.36 0.12
Ecuador 2.85*** 2.93*** 2.93*** 3.02*** 2.98*** 3.10*** 3.03*** 3.02*** 3.11***
Egypt, Arab Rep. 1.72*** 1.65*** 1.62*** 1.55*** 1.51*** 1.55*** 1.65*** 1.71*** 1.34***
Estonia 2.09*** 2.29*** 2.24*** 1.79*** 1.88*** 1.68*** 1.53*** 1.51*** 1.75***
Finland 0.28 0.15 0.19 0.42 0.25 0.52 0.64* 0.78* 0.52
France 0.99*** 0.89*** 0.91*** 1.00*** 0.90*** 0.94*** 1.16*** 1.28*** 1.11***
Germany 0.94*** 0.83*** 0.88*** 1.13*** 1.00*** 1.20*** 1.35*** 1.43*** 1.23***
Greece 0.87*** 0.96*** 0.92*** 0.77*** 0.78*** 0.84*** 0.63** 0.57** 0.69***
Guatemala 0.40 0.52 0.57* 0.85** 0.85** 0.96*** 0.74** 0.87** 0.94***
Hong Kong 2.41*** 2.78*** 2.67*** 2.24*** 2.37*** 2.19*** 1.96*** 1.95*** 2.31***
Hungary 0.07 0.14 0.10 0.12 0.05 0.34 0.36 0.38 0.19
Iceland 0.97*** 1.13*** 1.09*** 0.74 0.87** 0.74* 0.61 0.38 0.67
India 2.67*** 2.62*** 2.57*** 2.45*** 2.33*** 2.51*** 2.60*** 2.66*** 2.53***
Indonesia 0.63** 0.73*** 0.76*** 0.79*** 0.83*** 0.89*** 0.68** 0.75*** 0.85***
Iran 2.40*** 2.31*** 2.27*** 2.40*** 2.42*** 2.21*** 2.26*** 2.38*** 2.15***
Ireland 0.07 0.34 0.31 0.12 0.21 0.12 0.10 0.21 0.02
Israel 0.02 0.13 0.07 0.19 0.11 0.28 0.37 0.42 0.16
Italy 0.43 0.34 0.36 0.40 0.41 0.40 0.55* 0.53* 0.51*
Japan 2.87*** 2.90*** 2.94*** 2.99*** 2.90*** 3.06*** 3.14*** 3.23*** 3.06***
Jordan 0.35 0.54* 0.53* 0.31 0.39 0.25 0.15 0.06 0.53*
Kazakhstan 0.95*** 0.82*** 0.85*** 1.01*** 1.05*** 1.16*** 1.07*** 1.00*** 0.76***
Kenya 0.83** 0.75** 0.72** 0.81** 0.75* 0.85** 0.99** 0.89** 0.72*
Korea, Rep. 3.00*** 2.87*** 2.90*** 3.11*** 3.04*** 3.16*** 3.29*** 3.34*** 3.14***
Kyrgyz Republic 1.59*** 1.46*** 1.48*** 1.90*** 1.82*** 2.14*** 2.08*** 1.98*** 1.67***
Latvia 0.15 0.31 0.28 0.08 0.13 0.03 0.15 0.16 0.05
Lithuania 0.77*** 0.95*** 0.92*** 0.70** 0.76*** 0.54* 0.47 0.46 0.66**
Macao 3.63*** 3.86*** 3.86*** 3.69*** 3.70*** 3.87*** 3.55*** 3.53*** 3.78***
Madagascar 0.76 0.64 0.59 0.55 0.44 0.85 0.68 0.71 0.44
Malaysia 0.08 0.36 0.35 0.01 0.11 0.08 0.17 0.21 0.15
Mexico 0.44** 0.55*** 0.56*** 0.53*** 0.55*** 0.64*** 0.38* 0.52*** 0.55***
Moldova 1.80*** 1.63*** 1.65*** 1.91*** 1.85*** 2.18*** 2.06*** 2.07*** 1.77***
Morocco 1.26*** 1.11*** 1.07*** 1.02*** 0.95*** 1.07*** 1.13*** 1.18*** 0.87**
(continued on next page)
156
Table A15 (continued )
Year effects Basic Trade FDI Cocncor Goveff Politic Requa Law Voice
Mozambique 1.97*** 1.81*** 1.74*** 1.80*** 1.68*** 2.23*** 1.94*** 1.97*** 1.74***
Netherlands 0.32 0.55* 0.51 0.21 0.35 0.17 0.02 0.12 0.09
New Zealand 0.69** 0.60** 0.64** 0.93*** 0.78** 1.00*** 1.17*** 1.29*** 1.04***
Norway 0.85** 0.98*** 0.93** 0.68 0.78* 0.72* 0.55 0.35 0.57
Pakistan 0.51 0.49 0.43 0.33 0.27 0.12 0.43 0.39 0.16
Paraguay 0.58* 0.76** 0.77** 0.66** 0.62* 0.72** 0.61* 0.65* 0.76**
Peru 1.73*** 1.77*** 1.78*** 1.77*** 1.80*** 1.89*** 1.59*** 1.75*** 1.84***
Philippines 0.32 0.47* 0.48* 0.36 0.44 0.40 0.18 0.25 0.39
Poland 0.80*** 0.69*** 0.72*** 0.91*** 0.84*** 1.12*** 1.12*** 1.13*** 0.99***
Portugal 0.63*** 0.78*** 0.79*** 0.60** 0.67** 0.54** 0.44 0.33 0.47*
Romania 0.66*** 0.55*** 0.57*** 0.65*** 0.65*** 0.79*** 0.82*** 0.78*** 0.65***
Russia 1.82*** 1.75*** 1.78*** 1.91*** 1.94*** 1.79*** 1.99*** 1.88*** 1.74***
Saudi Arabia 1.81*** 1.98*** 1.98*** 1.88*** 1.83*** 2.05*** 1.84 1.75*** 2.22***
Serbia 0.08 0.04 0.02 0.22 0.18 0.27 0.30 0.29 0.16
Singapore 0.35 0.76** 0.73** 0.38 0.53 0.37 0.13 0.07 0.55
Slovak Republic 1.24*** 1.45*** 1.39*** 1.10*** 1.16*** 0.87*** 0.89*** 0.91*** 1.06***
Slovenia 0.46 0.65** 0.60* 0.24 0.31 0.11 0.10 0.02 0.19
South Africa 0.98*** 0.88*** 0.87*** 0.94*** 0.86*** 0.94*** 1.10*** 1.08*** 0.99***
Spain 0.16 0.04 0.05 0.10 0.02 0.08 0.29 0.35 0.22
Sri Lanka 0.09 0.18 0.18 0.00 0.07 0.08 0.15 0.21 0.13
Sudan 1.01** 0.97** 0.91** 1.03** 1.06** 0.68 0.99** 1.01** 0.73
Sweden 0.25 0.09 0.14 0.36 0.22 0.41 0.56 0.71* 0.48
Switzerland 0.99*** 1.17*** 1.11*** 0.82* 0.93** 0.81** 0.63 0.50 0.71*
Tajikistan 1.21*** 1.35*** 1.33*** 1.23*** 1.29*** 1.08** 1.16*** 1.19*** 1.53***
Thailand 0.48** 0.26 0.25 0.41 0.34 0.38 0.58** 0.57 0.33
Trinidad & Tobago 3.52*** 3.69*** 3.67*** 3.75*** 3.76*** 3.86*** 3.63*** 3.64*** 3.77***
Tunisia 0.19 0.00 0.02 0.11 0.02 0.19 0.20 0.27 0.10
Turkey 1.01*** 0.91*** 0.89*** 0.99*** 0.98*** 0.71*** 1.11*** 1.10*** 0.92***
Ukraine 1.34*** 1.20*** 1.22*** 1.35*** 1.34*** 1.59*** 1.46*** 1.40*** 1.26***
UK 0.30 0.22 0.27 0.46 0.32 0.42 0.73** 0.77** 0.56
US 1.18*** 1.22*** 1.26*** 1.39*** 1.28*** 1.35*** 1.63*** 1.65*** 1.50***
Uruguay 1.20*** 1.27*** 1.27*** 1.19*** 1.26*** 1.10*** 1.10*** 1.00*** 1.13***
Vietnam 0.45 0.24 0.22 0.38 0.30 0.78* 0.48 0.52 0.10
Yemen, Rep. 1.25*** 1.10** 1.04** 0.89* 0.88* 0.64 0.95** 0.90* 0.67
Note: *, **, *** are significant levels at 10%, 5%, and 1%, respectively.
157
N. Phuc Canh et al.
Table A16
Economic Integration and Innovations (Pool OLS, FEM, REM, and GFLS with lags of all independent variables).
Dep. Var: patent Basic Trade FDI
L.GDPpc ¡0.229*** 0.420*** 0.051 0.133 ¡0.229*** ¡0.205*** 0.443*** 0.044 0.132 ¡0.205*** ¡0.200*** 0.438*** 0.040 0.131 ¡0.200***
[0.036] [0.135] [0.122] [0.086] [0.036] [0.036] [0.135] [0.123] [0.086] [0.036] [0.036] [0.135] [0.123] [0.086] [0.036]
L.Cap 1.150*** 0.709*** 0.463*** 0.606*** 1.150*** 1.091*** 0.712*** 0.462*** 0.605*** 1.091*** 1.091*** 0.712*** 0.466*** 0.605*** 1.091***
[0.021] [0.064] [0.057] [0.043] [0.021] [0.023] [0.064] [0.057] [0.043] [0.023] [0.023] [0.064] [0.057] [0.043] [0.023]
L.Hc 1.366*** 1.570*** 0.563*** 0.466*** 1.366*** 1.488*** 1.487*** 0.498** 0.576*** 1.488*** 1.481*** 1.467*** 0.487** 0.566*** 1.481***
[0.076] [0.238] [0.193] [0.158] [0.076] [0.078] [0.240] [0.200] [0.167] [0.077] [0.078] [0.242] [0.201] [0.168] [0.078]
L.Govex 0.060*** ¡0.007 ¡0.024*** ¡0.010 0.060*** 0.055*** ¡0.007 ¡0.024*** ¡0.011 0.055*** 0.054 ¡0.007 ¡0.024*** ¡0.010 0.054***
[0.008] [0.009] [0.778] [0.009] [0.008] [0.008] [0.009] [0.009] [0.009] [0.007] [0.008] [0.010] [0.009] [0.009] [0.008]
L.Trade ¡0.401*** 0.247** 0.116 ¡0.193** ¡0.401*** ¡0.388** 0.245** 0.112 ¡0.188** ¡0.388***
[0.067] [0.102] [0.098] [0.093] [0.067] [0.075] [0.102] [0.099] [0.094] [0.075]
L.FDI ¡0.001 0.001 0.001 0.0001 ¡0.001
[0.006] [0.003] [0.003] [0.003] [0.006]
L.Inst ¡11.91*** ¡11.13*** ¡1.634** ¡4.444*** ¡11.91*** ¡9.875*** ¡11.98*** ¡1.872** -3.879*** ¡9.875*** ¡9.942*** ¡11.85*** ¡1.846** -3.877*** ¡9.942***
Const [0.280] [1.477] [0.778] [0.601] [0.279] [0.440] [1.515] [0.803] [0.660] [0.439] [0.463] [1.522] [0.813] [0.669] [0.4622]
158
N 1,356 1,356 1,356 1,356 1,356 1,356 1,356 1,356 1,356 1,356 1,347 1,347 1,347 1,347 1,347
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.779 0.966 0.210 0.207 0.785 0.966 0.211 0.203 0.785 0.966 0.211 0.204
R2-adj/R2-between 0.779 0.963 0.783 0.790 0.784 0.963 0.772 0.798 0.784 0.963 0.771 0.797
R-overall 0.737 0.744 0.724 0.754 0.726 0.755
Hettest 1.260 249.01*** 2.74* 248.77*** 2.66 245.86***
(0.262) (0.000) (0.098) (0.000) (0.103) (0.000)
Rho 0.932 0.821 0.935 0.820 0.935 0.823
F-test all u_i¼0 78.73***(0.000) 76.37***(0.000) 76.22***(0.000)
Hausman tests 228.6***(0.000) 259.4***(0.000) 671.02***(0.000)

Modified Wald test for 43573*** 65856*** 68103***
groupwise (0.000) (0.000) (0.000)
heteroskedasticity
N. Phuc Canh et al.
Table A17
Institutions, Economic Integration and Innovations: Control of Corruption, Government effectiveness, Political stability (Pool OLS, FEM, REM, and GFLS with lags of independent variables).
Dep. Var: patent Concor Goveff Politic
L.GDPpc ¡0.458*** 0.425*** 0.033 0.016 ¡0.458*** ¡0.528*** 0.352** ¡0.089 ¡0.145 ¡0.528*** ¡0.420*** 0.560*** 0.140 0.182* ¡0.420***
[0.057] [0.156] [0.141] [0.102] [0.057] [0.061] [0.167] [0.150] [0.110] [0.061] [0.048] [0.159] [0.144] [0.099] [0.048]
L.Cap 1.147*** 0.768*** 0.498*** 0.678*** 1.147*** 1.125*** 0.771*** 0.523*** 0.703*** 1.125*** 1.169*** 0.746*** 0.472*** 0.637*** 1.169***
[0.025] [0.074] [0.065] [0.047] [0.025] [0.025] [0.074] [0.066] [0.047] [0.025] [0.025] [0.074] [0.065] [0.048] [0.025]
L.Hc 1.468*** 1.296*** 0.385* 0.569*** 1.468*** 1.458*** 1.308*** 0.420* 0.577*** 1.458*** 1.374*** 1.224*** 0.265 0.488*** 1.374***
[0.086] [0.266] [0.224] [0.180] [0.085] [0.085] [0.265] [0.223] [0.178] [0.085] [0.085] [0.265] [0.224] [0.180] [0.085]
L.Govex 0.059*** ¡0.011 ¡0.027** ¡0.011 0.059*** 0.059*** ¡0.010 ¡0.024** ¡0.007 0.059*** 0.058*** ¡0.011 ¡0.029*** ¡0.010 0.058***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.011] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.359*** 0.212** 0.075 ¡0.238** ¡0.359*** ¡0.457*** 0.212* 0.085 ¡0.227** ¡0.457*** ¡0.456*** 0.202* 0.059 ¡0.257** ¡0.456***
[0.081] [0.114] [0.109] [0.103] [0.081] [0.083] [0.114] [0.109] [0.103] [0.082] [0.082] [0.113] [0.109] [0.103] [0.082]
L.FDI ¡0.005 0.002 0.002 0.001 ¡0.005 ¡0.002 0.002 0.002 0.002 ¡0.002 ¡0.003 0.001 0.002 0.001 ¡0.003
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
L.Inst 0.339*** ¡0.048 0.028 0.224*** 0.339*** 0.515*** 0.100 0.244** 0.461*** 0.515*** 0.423*** ¡0.195*** ¡0.169*** ¡0.058 0.423***
[0.059] [0.085] [0.086] [0.078] [0.059] [0.078] [0.106] [0.105] [0.100] [0.077] [0.058] [0.057] [0.058] [0.058] [0.057]
Const ¡8.688*** ¡11.96*** ¡1.757* -3.675*** ¡8.688*** ¡7.457*** ¡11.37*** ¡1.299 -2.851*** ¡7.457*** ¡8.531*** ¡12.603*** ¡1.927** ¡4.267** ¡8.531***
159
[0.585] [1.735] [0.927] [0.749] [0.583] [0.670] [1.794] [0.945] [0.778] [0.667] [0.560] [1.728] [0.925] [0.735] [0.558]
N 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.794 0.968 0.200 0.190 0.796 0.968 0.204 0.196 0.798 0.968 0.207 0.195
R2-adj/R2-between 0.793 0.964 0.767 0.801 0.795 0.964 0.777 0.809 0.796 0.965 0.719 0.788
R-overall 0.722 0.757 0.703 0.763 0.673 0.745
Hettest 3.13* 270.9*** 5.12** 265.15*** 6.77*** 282.38***
(0.077) (0.000) (0.024) (0.000) (0.009) (0.000)
Rho 0.936 0.822 0.932 0.822 0.940 0.821
F-test all u_i¼0 63.39***(0.000) 63.05***(0.000) 62.64***(0.000)

Hausman tests 176.2***(0.000) 144.0***(0.000) 42.24***(0.000)
Modified Wald test 160000*** 200000*** 140000***
for groupwise (0.000) (0.000) (0.000)
heteroskedasticity
Note: R2 & R2-adj are reported for Pool OLS; R2-within, R2-between, R2-overall are reported for FEM and REM. F-test is reported for Pool OLS, FEM, REM. Wald chi2 test is reported for FGLS. P-value is reported in (). Standard
errors are reported in []. Hausman test is used to test between FEM and REM. Standard errors are reported in []. Hettest is Breusch-Pagan/Cook-Weisberg test. The number in bold are statistically significant.
N. Phuc Canh et al.
Table A18
Institutions, Economic Integration and Innovations: Regulatory quality, Law, Voice and Accountability (Pool OLS, FEM, REM, and GFLS with all lags of independent variables).
Dep. Var: patent Requa Law Voice
L.GDPpc ¡0.250*** 0.457*** 0.077 0.136 ¡0.250*** ¡0.455*** 0.439*** 0.045 0.047 ¡0.455*** ¡0.163*** 0.428*** 0.046 0.131 ¡0.163***
[0.057] [0.158] [0.144] [0.103] [0.057] [0.056] [0.157] [0.142] [0.104] [0.056] [0.048] [0.154] [0.140] [0.097] [0.048]
L.Cap 1.126*** 0.761*** 0.493*** 0.645*** 1.126*** 1.130*** 0.770*** 0.497*** 0.662*** 1.130*** 1.111*** 0.756*** 0.486*** 0.649*** 1.111***
[0.025] [0.074] [0.065] [0.047] [0.025] [0.025] [0.074] [0.065] [0.047] [0.025] [0.026] [0.074] [0.065] [0.048] [0.026]
L.Hc 1.431*** 1.289*** 0.354 0.502*** 1.431*** 1.429*** 1.306*** 0.372* 0.515*** 1.429*** 1.475*** 1.330*** 0.386* 0.495*** 1.475***
[0.087] [0.266] [0.223] [0.181] [0.087] [0.085] [0.265] [0.222] [0.179] [0.085] [0.088] [0.265] [0.222] [0.181] [0.088]
L.Govex 0.061*** ¡0.011 ¡0.028*** ¡0.010 0.061*** 0.056*** ¡0.011 ¡0.027** ¡0.010 0.056*** 0.064*** ¡0.010 ¡0.027** ¡0.011 0.064***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.011] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.359*** 0.208* 0.069 ¡0.242** ¡0.359*** ¡0.410*** 0.205* 0.072 ¡0.233** ¡0.410*** ¡0.382*** 0.217* 0.080 ¡0.240** ¡0.382***
[0.084] [0.114] [0.109] [0.104] [0.083] [0.082] [0.114] [0.109] [0.104] [0.082] [0.084] [0.114] [0.109] [0.104] [0.084]
L.FDI ¡0.002 0.002 0.002 0.001 ¡0.002 ¡0.002 0.002 0.002 0.001 ¡0.002 ¡0.0005 0.002 0.002 0.001 ¡0.0005
[0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006] [0.006] [0.003] [0.003] [0.003] [0.006]
L.Inst 0.062 ¡0.114 ¡0.107 0.019 0.062 0.404*** ¡0.095 ¡0.028 0.194* 0.404*** ¡0.124** ¡0.193** ¡0.163* 0.042 ¡0.124**
[0.081] [0.091] [0.093] [0.091] [0.081] [0.069] [0.107] [0.108] [0.099] [0.069] [0.061] [0.091] [0.092] [0.084] [0.061]
Const ¡10.13*** -12.16*** -1.903** ¡4.079*** -10.134*** ¡8.137*** -12.15*** -1.785* -3.611*** ¡8.137*** -10.74*** -11.86*** -1.678* ¡4.068*** -10.74***
[0.634] [1.741] [0.936] [0.766] [0.632] [0.635] [1.757] [0.935] [0.783] [0.633] [0.531] [1.720] [0.927] [0.743] [0.529]
160

N 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131 1,131
Countries 83 83 83 83 83 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.788 0.968 0.201 0.192 0.794 0.968 0.200 0.190 0.789 0.968 0.203 0.191
R2-adj/R2-between 0.787 0.964 0.756 0.795 0.793 0.964 0.760 0.802 0.787 0.964 0.734 0.794
R-overall 0.710 0.752 0.714 0.759 0.687 0.751
Hettest 2.29 275.3*** 4.11** 279.72*** 2.07 (0.150) 287.94***
(0.130) (0.000) (0.043) (0.000) (0.000)
Rho 0.938 0.828 0.937 0.822 0.940 0.828
F-test all u_i¼0 65.68***(0.000) 63.30***(0.000) 65.57***(0.000)

Hausman tests 241.7***(0.000) 186.5***(0.000) 245.63***(0.000)
Modified Wald test for 91905*** 580000*** 81891***
groupwise (0.000) (0.000) (0.000)
heteroskedasticity
N. Phuc Canh et al.
Table A19
Institutions, Economic integration and Innovation: Control of Corruption and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Concor.Trade Concor.Trade and Concor.FDI
Pool OLS Pool OLS FEM REM FGLS Pool OLS Pool OLS FEM REM FGLS
L.GDPpc ¡0.442*** 0.403** 0.041 0.048 ¡0.442*** ¡0.441*** 0.403** 0.043 0.048 ¡0.441***
[0.059] [0.157] [0.141] [0.102] [0.058] [0.058] [0.157] [0.141] [0.101] [0.058]
L.Cap 1.149*** 0.762*** 0.515*** 0.687*** 1.149*** 1.159*** 0.762*** 0.515*** 0.689*** 1.159***
[0.025] [0.074] [0.065] [0.047] [0.025] [0.025] [0.074] [0.065] [0.047] [0.025]
L.Hc 1.419*** 1.246*** 0.390* 0.519*** 1.419*** 1.414*** 1.246*** 0.387* 0.517*** 1.414***
[0.093] [0.269] [0.223] [0.179] [0.093] [0.093] [0.270] [0.224] [0.179] [0.092]
L.Govex 0.056*** ¡0.011 ¡0.026** ¡0.011 0.056*** 0.055*** ¡0.011 ¡0.026** ¡0.010 0.055***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.011] [0.010] [0.008]
L.Trade ¡0.298*** 0.203* 0.076 ¡0.180* ¡0.298*** ¡0.319*** 0.203* 0.079 ¡0.177* ¡0.319***
[0.093] [0.114] [0.108] [0.103] [0.093] [0.093] [0.115] [0.109] [0.104] [0.093]
L.FDI ¡0.003 0.002 0.002 0.002 ¡0.003 0.013 0.002 0.002 0.0005 0.013
[0.006] [0.003] [0.003] [0.003] [0.006] [0.008] [0.004] [0.004] [0.005] [0.008]
L.Inst 0.723** 0.435 1.238*** 1.772*** 0.723** 0.511* 0.434 1.250*** 1.800*** 0.511*
[0.293] [0.386] [0.373] [0.353] [0.291] [0.303] [0.391] [0.377] [0.357] [0.302]
L.Inst.Trade ¡0.089 ¡0.112 ¡0.283*** ¡0.363*** ¡0.089 ¡0.026 ¡0.112 ¡0.287*** ¡0.370*** ¡0.026
[0.066] [0.088] [0.085] [0.080] [0.066] [0.071] [0.089] [0.086] [0.082] [0.070]
L.Inst.FDI ¡0.014** ¡0.0001 0.001 0.001 ¡0.014**
161
[0.005] [0.003] [0.003] [0.003] [0.005]

Const ¡8.946*** ¡11.490*** ¡2.061** ¡4.164*** ¡8.946*** ¡9.018*** ¡11.489*** ¡2.085** ¡4.208*** ¡9.018***
[0.616] [1.773] [0.927] [0.752] [0.613] [0.615] [1.774] [0.934] [0.754] [0.612]
Year effect Yes Yes
Country effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
F-test/Wald chi2 test 541.5*** 297.4*** 34.27*** 542.5*** 4367*** 484.5*** 291.3*** 30.44*** 546.3*** 4399***
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.794 0.968 0.209 0.201 0.796 0.968 0.209 0.200
R2-adj/R2-between 0.793 0.964 0.780 0.798 0.794 0.964 0.780 0.798
R-overall 0.744 0.760 0.744 0.702
Hettest 3.79* 276.4*** 4.71** 276.36***

(0.052) (0.000) (0.030) (0.000)
Corr(u_i, Xb) 0.702 0(assumed) 0.692 0(assumed)
Rho 0.932 0.825 0.932 0.822
F-test all u_i ¼ 0 64.02***(0.000) 63.51***(0.000)
Hausman tests 301.7***(0.000) 278.4***(0.000)
Modified Wald test for groupwise heteroskedasticity 280000*** 180000***
(0.000) (0.000)
Note: R2 & R2-adj are reported for sPool OLS; R2-within, R2-between, R2-overall are reported for FEM and REM. F-test is reported for Pool OLS, FEM, REM. Wald chi2 test is reported for FGLS. P-value is reported in (). Standard
N. Phuc Canh et al.
Table A20
Institutions, Economic integration and Innovations: Control of Corruption and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Goveff.Trade Goveff.Trade and Goveff.FDI
L.GDPpc ¡0.498*** 0.292* ¡0.061 ¡0.096 ¡0.498*** ¡0.492*** 0.295* ¡0.050 ¡0.092 ¡0.492***
[0.062] [0.167] [0.148] [0.109] [0.062] [0.062] [0.167] [0.149] [0.109] [0.062]
L.Cap 1.127*** 0.747*** 0.540*** 0.713*** 1.127*** 1.134*** 0.747*** 0.542*** 0.717*** 1.134***
[0.025] [0.074] [0.065] [0.047] [0.025] [0.025] [0.074] [0.065] [0.047] [0.025]
L.Hc 1.380*** 1.242*** 0.527** 0.576*** 1.380*** 1.376*** 1.224*** 0.508** 0.561*** 1.376***
[0.093] [0.264] [0.220] [0.176] [0.093] [0.093] [0.266] [0.221] [0.176] [0.093]
L.Govex 0.055*** ¡0.013 ¡0.026** ¡0.011 0.055*** 0.053*** ¡0.012 ¡0.025** ¡0.010 0.053***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.330*** 0.233** 0.156 ¡0.051 ¡0.330*** ¡0.360*** 0.244** 0.174 ¡0.027 ¡0.360***
[0.103] [0.113] [0.108] [0.104] [0.103] [0.104] [0.115] [0.110] [0.105] [0.103]
L.FDI 0.0002 0.002 0.002 0.003 0.0002 0.016* ¡0.001 ¡0.001 ¡0.002 0.016*
[0.006] [0.003] [0.003] [0.003] [0.006] [0.009] [0.005] [0.005] [0.005] [0.009]
L.Inst 1.178*** 1.670*** 2.452*** 2.989*** 1.178*** 0.951*** 1.725*** 2.532*** 3.092*** 0.951***
[0.331] [0.426] [0.407] [0.382] [0.330] [0.345] [0.435] [0.415] [0.389] [0.344]
L.Inst.Trade ¡0.154** ¡0.360*** ¡0.513*** ¡0.590*** ¡0.154** ¡0.088 ¡0.375*** ¡0.535*** ¡0.618*** ¡0.088
[0.075] [0.094] [0.091] [0.086] [0.075] [0.080] [0.098] [0.094] [0.089] [0.080]
L.Inst.FDI ¡0.015** 0.002 0.003 0.005 ¡0.015**
162
[0.006] [0.003] [0.003] [0.004] [0.006]

Const ¡8.004*** ¡10.396*** ¡2.286** ¡4.032*** ¡8.004*** ¡8.049*** ¡10.416*** ¡2.446** ¡4.186*** ¡8.049***
[0.720] [1.801] [0.948] [0.785] [0.717] [0.718] [1.802] [0.962] [0.792] [0.715]
Year effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.797 0.968 0.228 0.222 0.798 0.968 0.228 0.222
R2-adj/R2-between 0.795 0.965 0.784 0.799 0.796 0.965 0.783 0.798
R-overall 0.754 0.767 0.754 0.763
Hettest 6.22** 270.56*** 7.77*** 271.19***

(0.013) (0.000) (0.005) (0.000)
Rho 0.926 0.828 0.925 0.826
F-test all u_i ¼ 0 64.99***(0.000) 64.64***(0.000)
Hausman tests 1472.3***(0.000) 1727***(0.000)
(0.000) (0.000)
Note: R2 & R2-adj are reported for sPool OLS; R2-within, R2-between, R2-overall are reported for FEM and REM. F-test is reported for Pool OLS, FEM, REM. Wald chi2 test is reported for FGLS. P-value is reported in (). Standard errors
N. Phuc Canh et al.
Table A21
Institutions, Economic integration and Innovations: Political stability and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Politic.Trade Politic.Trade and Politic.FDI
L.GDPpc ¡0.394*** 0.531*** 0.152 0.206** ¡0.394*** ¡0.397*** 0.530*** 0.164 0.210** ¡0.397***
[0.050] [0.159] [0.143] [0.098] [0.050] [0.051] [0.159] [0.143] [0.098] [0.051]
L.Cap 1.168*** 0.748*** 0.494*** 0.654*** 1.168*** 1.167*** 0.750*** 0.501*** 0.657*** 1.167***
[0.025] [0.074] [0.065] [0.048] [0.025] [0.025] [0.074] [0.065] [0.048] [0.025]
L.Hc 1.330*** 1.173*** 0.304 0.492*** 1.330*** 1.334*** 1.136*** 0.272 0.471*** 1.334***
[0.089] [0.265] [0.223] [0.179] [0.089] [0.090] [0.267] [0.224] [0.179] [0.089]
L.Govex 0.055*** ¡0.015 ¡0.032*** ¡0.015 0.055*** 0.056*** ¡0.014 ¡0.031*** ¡0.014 0.056***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.420*** 0.144 ¡0.011 ¡0.301*** ¡0.420*** ¡0.423*** 0.153 0.007 ¡0.278*** ¡0.423***
[0.085] [0.116] [0.110] [0.103] [0.084] [0.085] [0.116] [0.110] [0.103] [0.084]
L.FDI ¡0.001 0.002 0.002 0.002 ¡0.001 ¡0.004 ¡0.003 ¡0.005 ¡0.006 ¡0.004
[0.006] [0.003] [0.003] [0.003] [0.006] [0.009] [0.005] [0.005] [0.005] [0.008]
L.Inst 0.954*** 0.570* 1.007*** 1.570*** 0.954*** 0.975*** 0.655* 1.103*** 1.677*** 0.975***
[0.321] [0.329] [0.326] [0.322] [0.320] [0.326] [0.335] [0.330] [0.326] [0.325]
L.Inst.Trade ¡0.130* ¡0.179** ¡0.276*** ¡0.385*** ¡0.130* ¡0.137* ¡0.204*** ¡0.306*** ¡0.418*** ¡0.137*
[0.077] [0.076] [0.075] [0.075] [0.077] [0.080] [0.078] [0.077] [0.077] [0.079]
L.Inst.FDI 0.004 0.007 0.009* 0.011** 0.004
163
[0.010] [0.005] [0.005] [0.006] [0.010]

Const ¡8.725*** ¡12.002*** ¡2.048** ¡4.383*** ¡8.725*** ¡8.687*** ¡11.962*** ¡2.240*** ¡4.496*** ¡8.687***
[0.571] [1.743] [0.920] [0.729] [0.569] [0.581] [1.743] [0.926] [0.732] [0.578]
Year effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.798 0.968 0.217 0.207 0.798 0.968 0.219 0.210
R2-adj/R2-between 0.797 0.965 0.742 0.787 0.797 0.965 0.738 0.785
R-overall 0.703 0.751 0.700 0.749
Hettest 8.24*** 287.60*** 8.03*** 287.33***

(0.004) (0.000) (0.005) (0.000)
Rho 0.936 0.824 0.936 0.826
F-test all u_i ¼ 0 63.36***(0.000) 63.52***(0.000)
Hausman tests 214.38***(0.000) 197.2***(0.000)
(0.000) (0.000)
N. Phuc Canh et al.
Table A22
Institutions, Economic integration and Innovations: Regulatory quality and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Requa.Trade Requa.Trade and Requa.FDI
L.GDPpc ¡0.239*** 0.437*** 0.184 0.258** ¡0.239*** ¡0.232*** 0.438*** 0.189 0.257** ¡0.232***
[0.059] [0.155] [0.140] [0.102] [0.059] [0.059] [0.156] [0.141] [0.102] [0.059]
L.Cap 1.126*** 0.683*** 0.479*** 0.625*** 1.126*** 1.134*** 0.683*** 0.481*** 0.630*** 1.134***
[0.025] [0.074] [0.063] [0.046] [0.025] [0.026] [0.074] [0.063] [0.046] [0.025]
L.Hc 1.409*** 1.124*** 0.472** 0.489*** 1.409*** 1.406*** 1.112*** 0.460** 0.478*** 1.406***
[0.093] [0.262] [0.217] [0.177] [0.093] [0.093] [0.264] [0.217] [0.177] [0.093]
L.Govex 0.059*** ¡0.016 ¡0.028*** ¡0.014 0.059*** 0.057*** ¡0.016 ¡0.028*** ¡0.013 0.057***
[0.009] [0.011] [0.010] [0.010] [0.008] [0.009] [0.011] [0.010] [0.010] [0.009]
L.Trade ¡0.319*** 0.267** 0.191* ¡0.020 ¡0.319*** ¡0.357*** 0.277** 0.207* 0.002 ¡0.357***
[0.103] [0.112] [0.107] [0.104] [0.103] [0.104] [0.114] [0.109] [0.106] [0.103]
L.FDI ¡0.001 0.002 0.003 0.002 ¡0.001 0.020* 0.0001 ¡0.001 ¡0.003 0.020*
[0.006] [0.003] [0.003] [0.003] [0.006] [0.011] [0.006] [0.006] [0.006] [0.010]
L.Inst 0.277 2.237*** 2.876*** 2.973*** 0.277 0.012 2.274*** 2.926*** 3.052*** 0.012
[0.333] [0.394] [0.378] [0.365] [0.331] [0.349] [0.401] [0.384] [0.372] [0.348]
L.Inst.Trade ¡0.051 ¡0.574*** ¡0.729*** ¡0.721*** ¡0.051 0.026 ¡0.584*** ¡0.742*** ¡0.741*** 0.026
[0.077] [0.094] [0.090] [0.086] [0.076] [0.083] [0.096] [0.092] [0.088] [0.083]
L.Inst.FDI ¡0.018** 0.002 0.003 0.005 ¡0.018**
164
[0.007] [0.004] [0.004] [0.004] [0.007]

Const ¡10.319*** ¡10.551*** ¡3.348*** ¡5.601*** ¡10.319*** ¡10.359*** ¡10.567*** ¡3.450*** ¡5.723*** ¡10.359***
[0.693] [1.730] [0.925] [0.771] [0.690] [0.692] [1.731] [0.936] [0.776] [0.689]
Year effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.788 0.969 0.249 0.241 0.789 0.969 0.249 0.241
R2-adj/R2-between 0.787 0.966 0.707 0.754 0.788 0.966 0.709 0.753
R-overall 0.681 0.724 0.683 0.724
Hettest 2.53 293.93*** 3.56* 294.33***

(0.112) (0.000) (0.059) (0.000)
Rho 0.936 0.8377 0.936 0.834
F-test all u_i ¼ 0 70.56***(0.000) 70.10***(0.000)
Hausman tests 154.21***(0.000) 144.8***(0.000)
(0.000) (0.000)
Note: R2 & R2-adj are reported for sPool OLS; R2-within, R2-between, R2-overall are reported for FEM and REM. F-test is reported for Pool OLS, FEM, REM. Wald chi2 test is reported for FGLS. P-value is reported in (). Standard errors
N. Phuc Canh et al.
Table A23
Institutions, Economic integration and Innovations: Rule of Law and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Law.Trade Law.Trade and Law.FDI
L.GDPpc ¡0.409*** 0.386** 0.050 0.048 ¡0.409*** ¡0.407*** 0.390** 0.062 0.054 ¡0.407***
[0.059] [0.157] [0.141] [0.103] [0.059] [0.059] [0.157] [0.141] [0.103] [0.058]
L.Cap 1.131*** 0.746*** 0.509*** 0.677*** 1.131*** 1.139*** 0.746*** 0.511*** 0.680*** 1.139***
[0.025] [0.074] [0.064] [0.046] [0.025] [0.025] [0.074] [0.064] [0.046] [0.025]
L.Hc 1.332*** 1.226*** 0.447** 0.498*** 1.332*** 1.326*** 1.206*** 0.426* 0.482*** 1.326***
[0.093] [0.265] [0.220] [0.177] [0.092] [0.092] [0.267] [0.221] [0.177] [0.092]
L.Govex 0.052*** ¡0.013 ¡0.027*** ¡0.013 0.052*** 0.050*** ¡0.012 ¡0.026** ¡0.012 0.050***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.289*** 0.209* 0.111 ¡0.117 ¡0.289*** ¡0.309*** 0.218* 0.127 ¡0.098 ¡0.309***
[0.093] [0.114] [0.108] [0.103] [0.093] [0.094] [0.114] [0.109] [0.104] [0.093]
L.FDI 0.001 0.002 0.002*** 0.002 0.001 0.016* ¡0.0003 ¡0.001 ¡0.002 0.016*
[0.006] [0.003] [0.003] [0.003] [0.006] [0.009] [0.005] [0.005] [0.005] [0.009]
L.Inst 1.249*** 1.159*** 1.946*** 2.581*** 1.249*** 1.050*** 1.217*** 2.025*** 2.675*** 1.050***
[0.324] [0.416] [0.402] [0.379] [0.322] [0.334] [0.425] [0.409] [0.386] [0.332]
L.Inst.Trade ¡0.202*** ¡0.276*** ¡0.438 ¡0.539*** ¡0.202*** ¡0.141* ¡0.292*** ¡0.460*** ¡0.566*** ¡0.141*
[0.075] [0.089] [0.086] [0.083] [0.075] [0.080] [0.092] [0.089] [0.085] [0.079]
L.Inst.FDI ¡0.015** 0.002 0.004 0.004 ¡0.015**
165
[0.006] [0.003] [0.003] [0.004] [0.006]

Const ¡8.733*** ¡11.002*** ¡2.341** ¡4.198*** ¡8.733*** ¡8.789*** ¡11.02*** ¡2.490*** ¡4.331*** ¡8.789***
[0.671] [1.788] [0.931] [0.777] [0.669] [0.670] [1.789] [0.942] [0.783] [0.667]
Year effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.796 0.968 0.220 0.212 0.797 0.968 0.220 0.213
R2-adj/R2-between 0.794 0.965 0.779 0.794 0.795 0.965 0.777 0.792
R-overall 0.750 0.762 0.749 0.760
Hettest 5.20** 281.35*** 6.81*** 282.18***

(0.023) (0.000) (0.009) (0.000)
Rho 0.931 0.827 0.930 0.826
F-test all u_i ¼ 0 64.64***(0.000) 62.28***(0.000)
Hausman tests 542.82***(0.000) 527.5***(0.000)
(0.000) (0.000)
N. Phuc Canh et al.
Table A24
Institutions, Economic integration and Innovations: Voice and Accountability and the associations (Pool OLS, OLS, FEM, REM and FGLS with lags of all independent variables).
Dep. Var: patent Voice.Trade Voice.Trade and Voice.FDI
L.GDPpc ¡0.154*** 0.404*** 0.121 0.164* ¡0.154*** ¡0.163*** 0.411*** 0.134 0.169* ¡0.163***
[0.049] [0.153] [0.138] [0.096] [0.048] [0.049] [0.153] [0.138] [0.095] [0.048]
L.Cap 1.106*** 0.703*** 0.490*** 0.649*** 1.106*** 1.114*** 0.701*** 0.491*** 0.652*** 1.114***
[0.026] [0.074] [0.064] [0.047] [0.026] [0.026] [0.074] [0.064] [0.047] [0.026]
L.Hc 1.443*** 1.124*** 0.408* 0.481*** 1.443*** 1.438*** 1.105*** 0.393* 0.473*** 1.438***
[0.090] [0.266] [0.217] [0.178] [0.090] [0.090] [0.267] [0.217] [0.177] [0.090]
L.Govex 0.064*** ¡0.014 ¡0.027*** ¡0.013 0.064*** 0.065*** ¡0.013 ¡0.026** ¡0.012 0.065***
[0.008] [0.011] [0.010] [0.010] [0.008] [0.008] [0.011] [0.010] [0.010] [0.008]
L.Trade ¡0.354*** 0.194* 0.084 ¡0.182* ¡0.354*** ¡0.392*** 0.211* 0.106 ¡0.159 ¡0.392***
[0.085] [0.113] [0.106] [0.101] [0.085] [0.087] [0.114] [0.107] [0.103] [0.086]
L.FDI 0.001 0.002 0.002 0.002 0.001 0.014* ¡0.002 ¡0.003 ¡0.004 0.014*
[0.006] [0.003] [0.003] [0.003] [0.006] [0.008] [0.005] [0.005] [0.005] [0.008]
L.Inst 0.481 1.642*** 2.433*** 2.794*** 0.481 0.263 1.721*** 2.520*** 2.891*** 0.263
[0.351] [0.410] [0.388] [0.379] [0.350] [0.363] [0.416] [0.392] [0.383] [0.362]
L.Inst.Trade ¡0.141* ¡0.416*** ¡0.590*** ¡0.634*** ¡0.141* ¡0.073** ¡0.439*** ¡0.616*** ¡0.663*** ¡0.073
[0.081] [0.091] [0.086] [0.085] [0.080] [0.086] [0.093] [0.088] [0.087] [0.085]
L.Inst.FDI ¡0.016*** 0.004 0.005 0.006 ¡0.016**
166
[0.007] [0.004] [0.004] [0.004] [0.007]

Const ¡10.794*** ¡10.393*** ¡2.496*** ¡4.533*** ¡10.794*** ¡10.715 ¡10.431*** ¡2.671*** ¡4.694*** ¡10.715***
[0.531] [1.733] [0.914] [0.732] [0.529] [0.531] [1.733] [0.922] [0.736] [0.529]
Year effect Yes Yes
N 1131 1131 1131 1131 1131 1131 1131 1131 1131 1131
Countries 83 83 83 83 83 83 83 83 83 83
(0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000) (0.000)
R2/R2-within 0.789 0.968 0.237 0.228 0.790 0.968 0.239 0.230
R2-adj/R2-between 0.788 0.965 0.721 0.764 0.789 0.965 0.721 0.763
R-overall 0.696 0.733 0.695 0.732
Hettest 2.01 274.14*** 2.81* 274.50***

(0.157) (0.000) (0.094) (0.000)
Rho 0.937 0.836 0.936 0.833
F-test all u_i ¼ 0 68.84***(0.000) 68.56***(0.000)
Hausman tests 87.01***(0.000) 98.39***(0.000)
(0.000) (0.000)
Table A25
Year effects and Country effects from Pool OLS in Tables A16, A17, A18.
Year effects Basic Trade FDI Concor Goveff Politic Requa Law Voice
1998 0.04 0.05 0.07

1999 0.10 0.10 0.11 0.10 0.10 0.11 0.10 0.10 0.11
2000 0.06 0.06 0.07
2001 0.12 0.15* 0.16* 0.14* 0.14 0.15* 0.15* 0.15* 0.15*
2002 0.18** 0.20** 0.21**
2003 0.22*** 0.24*** 0.25*** 0.23*** 0.23*** 0.23*** 0.24*** 0.23*** 0.24***
2004 0.19** 0.21** 0.22** 0.19** 0.19** 0.22** 0.20** 0.20** 0.20**
2005 0.25*** 0.29*** 0.29*** 0.27*** 0.27*** 0.31*** 0.27*** 0.27*** 0.27***
2006 0.39*** 0.43*** 0.44*** 0.42*** 0.41*** 0.45*** 0.43*** 0.42*** 0.42***
2007 0.45*** 0.50*** 0.51*** 0.50*** 0.48*** 0.53*** 0.50*** 0.50*** 0.51***
2008 0.51*** 0.56*** 0.57*** 0.56*** 0.54*** 0.59*** 0.56*** 0.56*** 0.57***
2009 0.61*** 0.67*** 0.68*** 0.66*** 0.64*** 0.70*** 0.66*** 0.67*** 0.67***
2010 0.58*** 0.60*** 0.60*** 0.59*** 0.57*** 0.63*** 0.59*** 0.59*** 0.60***
2011 0.72*** 0.76*** 0.76*** 0.75*** 0.73*** 0.79*** 0.75*** 0.75*** 0.76***
2012 0.83*** 0.88*** 0.88*** 0.86*** 0.84*** 0.90*** 0.86*** 0.87*** 0.87***
2013 0.81*** 0.86*** 0.86*** 0.85*** 0.82*** 0.88*** 0.85*** 0.85*** 0.85***
2014 0.89*** 0.94*** 0.94*** 0.92*** 0.90*** 0.95*** 0.92*** 0.92*** 0.93***
Country effects
Armenia 1.03*** 0.90*** 0.90*** 1.20*** 1.13*** 1.31*** 1.30*** 1.25*** 0.97**
Australia 1.11*** 1.16*** 1.13*** 0.80** 0.99*** 0.85** 0.71* 0.72* 0.71*
Austria 0.07 0.33 0.31 0.01 0.19 0.04 0.07 0.10 0.07
Bangladesh 0.59 0.55 0.51 0.26 0.19 0.33 0.32 0.31 0.19
Barbados 2.57*** 2.81*** 2.81*** 2.37*** 2.55*** 2.39*** 2.36*** 2.28*** 2.34***
Belgium 1.15*** 1.54*** 1.58*** 1.33*** 1.49*** 1.39*** 1.25*** 1.25*** 1.23***
Brazil 1.42*** 1.44*** 1.43*** 1.29*** 1.28*** 1.26*** 1.35*** 1.30*** 1.32***
Brunei Darussalam 1.70*** 2.01*** 2.00*** 1.71*** 1.77*** 1.76*** 1.63*** 1.64*** 1.97***
Bulgaria 0.59** 0.35 0.35 0.51* 0.46 0.62** 0.62** 0.56* 0.50*
Cambodia 1.30** 1.64*** 1.69*** 1.72*** 1.76*** 1.50** 1.62*** 1.67*** 1.92***
Canada 0.83** 1.00*** 0.97*** 0.65 0.86** 0.67* 0.56 0.57 0.56
Chile 0.48*** 0.66*** 0.66*** 0.47* 0.66*** 0.46** 0.34 0.38 0.44**
China 4.31*** 4.19*** 4.17*** 4.12*** 4.03*** 4.23*** 4.20*** 4.15*** 3.82***
Colombia 0.63*** 0.70*** 0.71*** 0.71*** 0.74*** 1.00*** 0.62*** 0.70*** 0.81***
Croatia 0.24 0.44* 0.43* 0.25 0.30 0.20 0.18 0.21 0.29
Czech Republic 1.50*** 1.76*** 1.73*** 1.42*** 1.52*** 1.27*** 1.28*** 1.33*** 1.37***
Denmark 0.36 0.61 0.58 0.20 0.43 0.29 0.12 0.12 0.12
Ecuador 2.80*** 2.93*** 2.93*** 2.99*** 2.93*** 3.04*** 2.98*** 2.98*** 3.08***
Egypt, Arab Rep. 1.85*** 1.74*** 1.72*** 1.56*** 1.51*** 1.57*** 1.61*** 1.63*** 1.32***
Estonia 2.16*** 2.47*** 2.46*** 2.01*** 2.14*** 1.97*** 1.87*** 1.91*** 1.98***
Finland 0.13 0.07 0.05 0.25 0.00 0.25 0.33 0.34 0.33
France 0.94*** 0.78*** 0.80*** 0.92*** 0.77** 0.83*** 0.99*** 1.01*** 1.02***
Germany 0.87*** 0.71** 0.74** 0.98** 0.79** 0.99*** 1.07*** 1.05*** 1.06***
Greece 0.90*** 1.04*** 1.01*** 0.81*** 0.84*** 0.88*** 0.72*** 0.72*** 0.73***
Guatemala 0.33 0.54 0.56 0.78* 0.78* 0.87** 0.71* 0.78* 0.87**
Hong Kong 2.39*** 2.96*** 2.93*** 2.67*** 2.86*** 2.68*** 2.53*** 2.59*** 2.77***
Hungary 0.01 0.32 0.31 0.13 0.25 0.005 0.004 0.03 0.07
Iceland 1.12*** 1.36*** 1.34*** 0.93* 1.13** 1.01** 0.90* 0.83 0.88*
India 2.99*** 2.93*** 2.90*** 2.67*** 2.53*** 2.74*** 2.77*** 2.77*** 2.75***
Indonesia 0.33 0.50* 0.52* 0.61* 0.65** 0.68** 0.54* 0.59* 0.67**
Iran 2.65*** 2.51*** 2.49*** 2.61*** 2.64*** 2.47*** 2.52*** 2.61*** 2.34***
Ireland 0.18 0.61* 0.60* 0.42 0.56 0.47 0.31 0.31 0.33
Israel 0.14 0.31 0.28 0.03 0.10 0.37 0.11 0.10 0.02
Italy 0.41 0.27 0.29 0.32 0.33 0.31 0.42 0.37 0.44
Japan 2.81*** 2.88*** 2.90*** 3.00*** 2.88*** 3.03*** 3.06*** 3.07*** 3.06***
Jordan 0.31 0.62** 0.62** 0.45 0.57* 0.44 0.37 0.36 0.70**
Kazakhstan 0.97*** 0.77*** 0.77*** 0.87*** 0.94*** 1.00*** 0.92*** 0.88*** 0.61**
Kenya 1.02*** 0.88** 0.86** 0.94** 0.86** 0.97** 1.06** 0.98** 0.84**
Korea, Rep. 3.02*** 2.83*** 2.85*** 3.01*** 2.91*** 3.04*** 3.11*** 3.10*** 3.03***
Kyrgyz Republic 1.61*** 1.39*** 1.39*** 1.71*** 1.62*** 1.90*** 1.83*** 1.74*** 1.46***
Latvia 0.22 0.48* 0.47* 0.29 0.37 0.22 0.16 0.19 0.26
Lithuania 0.85*** 1.13*** 1.12*** 0.91*** 1.00*** 0.81*** 0.77** 0.81** 0.87***
Macao 3.60*** 3.98*** 3.98*** 3.75*** 3.77*** 3.92*** 3.67*** 3.68*** 3.84***
Madagascar 0.89*** 0.70 0.66 0.62 0.47 0.84 0.68 0.67 0.48
Malaysia 0.00 0.44* 0.43* 0.18 0.33 0.13 0.08 0.10 0.35
Mexico 0.34* 0.50*** 0.51*** 0.51** 0.54*** 0.59*** 0.41* 0.51** 0.52***
Moldova 1.78*** 1.50*** 1.50*** 1.73*** 1.67*** 1.93*** 1.82*** 1.80*** 1.59***
Morocco 1.44*** 1.19*** 1.17*** 1.14*** 1.06*** 1.16*** 1.20*** 1.21*** 0.96**
Mozambique 2.16*** 1.91*** 1.85*** 1.82*** 1.66** 2.14*** 1.90*** 1.90*** 1.76***
(continued on next page)
167
Table A25 (continued )
Year effects Basic Trade FDI Concor Goveff Politic Requa Law Voice
Netherlands 0.44 0.79** 0.78** 0.51 0.72* 0.55 0.41 0.43 0.41
New Zealand 0.56* 0.42 0.44 0.86** 0.63* 0.84** 0.95*** 0.95** 0.94***
Norway 1.03*** 1.23*** 1.20*** 0.85* 1.02** 0.95** 0.82* 0.76 0.76
Pakistan 0.79* 0.74* 0.70* 0.57 0.50 0.44 0.64 0.61 0.39
Paraguay 0.51* 0.79** 0.80** 0.70* 0.63* 0.73** 0.65* 0.67* 0.80**
Peru 1.70*** 1.76*** 1.77*** 1.70*** 1.74*** 1.79*** 1.59*** 1.70*** 1.78***
Philippines 0.19 0.43 0.44 0.43 0.53 0.46 0.32 0.38 0.46
Poland 0.79*** 0.62*** 0.64*** 0.80*** 0.70*** 0.94*** 0.92*** 0.88*** 0.88***
Portugal 0.61*** 0.86*** 0.86*** 0.63** 0.75*** 0.63** 0.55* 0.54 0.51*
Romania 0.65*** 0.48** 0.49*** 0.54*** 0.53*** 0.64*** 0.64*** 0.59*** 0.53***
Russia 1.86*** 1.75*** 1.77*** 1.83*** 1.88*** 1.75*** 1.89*** 1.82*** 1.66***
Saudi Arabia 1.74*** 2.00*** 2.00*** 1.88*** 1.82*** 2.02*** 1.84*** 1.81*** 2.25***
Serbia 0.09 0.09 0.08 0.12 0.08 0.14 0.16 0.14 0.06
Singapore 0.30 0.94*** 0.94*** 0.68 0.92** 0.75* 0.58 0.61 0.90**
Slovak Republic 1.32*** 1.64*** 1.62*** 1.37*** 1.46*** 1.22*** 1.24*** 1.30*** 1.34***
Slovenia 0.59** 0.87*** 0.85*** 0.48 0.59 0.42 0.42 0.40 0.44
South Africa 1.03*** 0.86*** 0.86*** 0.86*** 0.75*** 0.83*** 0.95*** 0.90*** 0.90***
Spain 0.15 0.03 0.02 0.05 0.08 0.13 0.14 0.13 0.15
Sri Lanka 0.03 0.13 0.13 0.11 0.03 0.03 0.19 0.20 0.04
Sudan 1.25*** 1.18*** 1.14*** 1.19** 1.23*** 0.92* 1.17** 1.20** 0.86*
Sweden 0.08 0.16 0.13 0.15 0.07 0.12 0.22 0.24 0.24
Switzerland 1.14*** 1.41*** 1.38*** 1.04** 1.22*** 1.10*** 0.98** 0.97** 0.96**
Tajikistan 1.16*** 1.38*** 1.39*** 1.41*** 1.46*** 1.26*** 1.37*** 1.39*** 1.73***
Thailand 0.65*** 0.31 0.30 0.33 0.23 0.31 0.43 0.40 0.25
Trinidad & Tobago 3.81*** 4.08*** 4.08*** 3.84*** 3.85*** 3.95*** 3.76*** 3.80*** 3.85***
Tunisia 0.29 0.01 0.03 0.06 0.06 0.11 0.11 0.12 0.18
Turkey 1.19*** 1.03*** 1.02*** 1.16*** 1.14*** 0.94*** 1.23*** 1.21*** 1.08***
Ukraine 1.36*** 1.14*** 1.14*** 1.23*** 1.22*** 1.45*** 1.31*** 1.25*** 1.13***
UK 0.23 0.12 0.15 0.35 0.15 0.27 0.47 0.43 0.42
US 1.18*** 1.26*** 1.28*** 1.44*** 1.28*** 1.37*** 1.55*** 1.51*** 1.53***
Uruguay 1.21*** 1.33*** 1.33*** 1.15*** 1.26*** 1.12*** 1.13*** 1.10*** 1.10***
Vietnam 0.73** 0.40 0.37 0.41 0.31 0.73* 0.47 0.48 0.11
Yemen, Rep. 1.50*** 1.24*** 1.20*** 1.01* 1.01* 0.83 1.06** 1.03** 0.78
Note: *, **, *** are significant levels at 10%, 5%, and 1%, respectively. The number in bold are statistically significant.
Acknowledgment
This research has been funded by the University of Economics, Ho Chi Minh City, Vietnam.
Appendix
Appendix A. Supplementary data
Supplementary data to this article can be found online at https://doi.org/10.1016/j.inteco.2018.10.002.
References
Acemoglu, D., Robinson, J., 2008. The Role of Institutions in Growth and Development. World Bank, Washington DC.
Arcand, J.L., Berkes, E., Panizza, U., 2015. Too much finance? J. Econ. Growth 20, 105–148.
Arellano, M., Bond, S., 1991. Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. Rev. Econ. Stud. 58,
277–297.
Arellano, M., Bover, O., 1995. Another look at the instrumental variable estimation of error-components models. J. Econom. 68, 29–51.
Baltagi, B., 2008. Econometric Analysis of Panel Data. John Wiley & Sons.
Bank, W., 2015. In: BANK, W. (Ed.), Worldwide Governance Indicators.
Bardhan, P., 1998. The Contributions of Endogenous Growth Theory to the Analysis of Development Problems: an Assessment. New Theories in Growth and
Development. Springer.
Ben Naceur, S., Blotevogel, R., Fischer, M., Shi, H., 2017. Financial Development and Source of Growth; New Evidence. International Monetary Fund.
Bhattacharya, M., Bloch, H., 2004. Determinants of innovation. Small Bus. Econ. 22, 155–162.
Bhaumik, S.K., Driffield, N., Zhou, Y., 2016. Country specific advantage, firm specific advantage and multinationality – sources of competitive advantage in emerging
markets: evidence from the electronics industry in China. Int. Bus. Rev. 25, 165–176.
Blundell, R., Bond, S., 1998. Initial conditions and moment restrictions in dynamic panel data models. J. Econom. 87, 115–143.
168
Branstetter, L., Fisman, R., Foley, C.F., Saggi, K., 2011. Does intellectual property rights reform spur industrial development? J. Int. Econ. 83, 27–36.
Cecchetti, S.G., Kharroubi, E., 2012. Reassessing the Impact of Finance on Growth.
Chandran, V.G.R., Munusamy, 2009. Trade openness and manufacturing growth in Malaysia. J. Pol. Model. 31, 637–647.
Chen, Y., Puttitanun, T., 2005. Intellectual property rights and innovation in developing countries. J. Dev. Econ. 78, 474–493.
Cingano, F., Pinotti, P., 2016. Trust, firm organization, and the pattern of comparative advantage. J. Int. Econ. 100, 1–13.
Coe, D.T., Helpman, E., 1995. International r&d spillovers. Eur. Econ. Rev. 39, 859–887.
Coe, D.T., Helpman, E., Hoffmaister, A., 1995. North-south R&D Spillovers. National Bureau of Economic Research.
Connolly, M., 2003. The dual nature of trade: measuring its impact on imitation and growth. J. Dev. Econ. 72, 31–55.
Deidda, L., Fattouh, B., 2002. Non-linearity between finance and growth. Econ. Lett. 74, 339–345.
Duncan, R., 2014. Institutional quality, the cyclicality of monetary policy and macroeconomic volatility. J. Macroecon. 39, 113–155.
Farhadi, M., Islam, M.R., Moslehi, S., 2015. Economic freedom and productivity growth in resource-rich economies. World Dev. 72, 109–126.
Findlay, R., 1978. Relative backwardness, direct foreign investment, and the transfer of technology: a simple dynamic model. Q. J. Econ. 92, 1–16.
Fujimoto, S., Ishikawa, A., Mizuno, T., Watanabe, T., 2015. Are Firms that Are Awarded More Patents More Productive? Econophysics and Data Driven Modelling of
Market Dynamics. Springer.
Gould, D.M., Gruben, W.C., 1996. The role of intellectual property rights in economic growth. J. Dev. Econ. 48, 323–350.
Gradstein, M., 2004. Governance and growth. J. Dev. Econ. 73, 505–518.
Grossman, G.M., Helpman, E., 1993. Endogenous Innovation in the Theory of Growth. National Bureau of Economic Research.
Grossman, G.M., Helpman, E., 1995. Technology and trade. Handb. Int. Econ. 3, 1279–1337.
Hall, B.H., 2007. Patents and patent policy. Oxf. Rev. Econ. Pol. 23, 568–587.
Hasan, I., Tucci, C.L., 2010. The innovation–economic growth nexus: global evidence. Res. Pol. 39, 1264–1276.
Hu, A.G., Png, I.P., 2013. Patent rights and economic growth: evidence from cross-country panels of manufacturing industries. Oxf. Econ. Pap. 65, 675–698.
Kanwar, S., 2012. Intellectual property protection and technology licensing: the case of developing countries. J. Law Econ. 55, 539–564.
Kaufmann, D., Kraay, A., Mastruzzi, M., 2011. The worldwide governance indicators: methodology and analytical issues. Hague J. Rule Law 3, 220–246.
Lederman, D., Saenz, L., 2005. Innovation Around the World, 1960–2000. World Bank Policy Research Working Paper, p. 3774.
Lee, L.-F., 2007. GMM and 2SLS estimation of mixed regressive, spatial autoregressive models. J. Econom. 137, 489–514.
Lichtenberg, F., De La Potterie, B.V.P., 1996. International R&D Spillovers: a Re-examination. National bureau of economic research.
Lin, X., Lee, L.-F., 2010. GMM estimation of spatial autoregressive models with unknown heteroskedasticity. J. Econom. 157, 34–52.
Maskus, K.E., Penubarti, M., 1995. How trade-related are intellectual property rights? J. Int. Econ. 39, 227–248.
Nickell, S., 1981. Biases in dynamic models with fixed effects. Econometrica: J. Economet. Soc. 1417–1426.
Papke, L.E., Wooldridge, J.M., 2005. A computational trick for delta-method standard errors. Econ. Lett. 86, 413–417.
Pesaran, M.H., 2004. General Diagnostic Tests for Cross Section Dependence in Panels.
Pesaran, M.H., 2007. A simple panel unit root test in the presence of cross-section dependence. J. Appl. Econom. 22, 265–312.
Rioja, F., Valev, N., 2004. Finance and the sources of growth at various stages of economic development. Econ. Inq. 42, 127–140.
Roodman, D., 2006. How to Do Xtabond2: an Introduction to Difference and System GMM in Stata. Center for Global Development Working Paper, No. 103.
Sala-I-Martin, X., 2001. 15 Years of New Growth Economics: What have we Learnt? Central Bank of Chile Working Paper 172, p. 22.
Schneider, P.H., 2005. International trade, economic growth and intellectual property rights: a panel data study of developed and developing countries. J. Dev. Econ.
78, 529–547.
Stern, S., Porter, M.E., Furman, J.L., 2000. The Determinants of National Innovative Capacity. National bureau of economic research.
Tebaldi, E., Elmslie, B., 2008. Institutions, innovation and economic growth. J. Econ. Dev. 33, 27.
Tebaldi, E., Elmslie, B., 2013. Does institutional quality impact innovation? Evidence from cross-country patent grant data. Appl. Econ. 45, 887–900.
Thomas, M.A., 2010. What do the worldwide governance indicators measure&quest? Eur. J. Dev. Res. 22, 31–54.
Voigt, S., 2013. How (not) to measure institutions. J. Inst. Econ. 9, 1–26.
Wang, M., Wong, S., 2009. What drives economic growth? The case of cross-border M&A and greenfield FDI activities. Kyklos 62, 316–330.
Windmeijer, F., 2005. A finite sample correction for the variance of linear efficient two-step GMM estimators. J. Econom. 126, 25–51.
Yanikkaya, H., 2003. Trade openness and economic growth: a cross-country empirical investigation. J. Dev. Econ. 72, 57–89.
Zhang, C., Nian, J., 2013. Panel estimation for transport sector CO2 emissions and its affecting factors: a regional analysis in China. Energy Pol. 63, 918–926.
169

Very Relevant Evidences From System GMااM Estimates

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Very Relevant Evidences From System GMااM Estimates

Uploaded by

Copyright:

Available Formats

International Economics 157 (2019) 134–169

Contents lists available at ScienceDirect

Do economic openness and institutional quality inﬂuence patents?

2. Methodology and data

Patentit ¼ β1 Patentit1 þ δj Xjt þ εit (1)

Patentit ¼ β1 Patentit1 þ δj Xjt þ α1 Fdiit þ α2 Tradeit þ uit (2)

Patentit ¼ β1 Patentit1 þ δj Xjt þ α1 Fdiit þ α2 Tradeit þ γ k Inquakt þ uit (3)

Variable Deﬁnitions Sources

Dependent variable Patent Innovation - Logarithm of Patent applications (residents) WDI

Variable Obs Mean Std. Dev. Min Max

Patent 1429 6.216 2.503 0.000 13.594

Dep. var: Patent (1) (2) (3)

Patent (1) 0.9159*** [0.0036] 0.8409*** [0.0048] 0.8565*** [0.0049]

N 1314 1314 1304

Dep. var: Patent (4) (5) (6) (7) (8) (9)

Patent (1) 0.8077*** 0.7596*** 0.8410*** 0.8008*** 0.8117*** 0.8176***

N 892 892 1098 820 892 1098

Dep. var: Patent (10) (11) (12) (13)

N 1024 892 892 892

Dep. var: Patent (14) (15) (16) (17)

N 1098 892 1024 820

Dep. var: Patent (18) (19) (20) (21)

N 892 892 892 892

Fig. 1. The overview of the trade activities and innovations.

Argentina Denmark Italy New Zealand Sri Lanka

N 1314 1304 892 1098 892 820 892 820

N. Phuc Canh et al.

Dep. var: Patent Concor Politic Goveff Requa Law Voice

International Economics 157 (2019) 134–169

N 1314 1314 1304 892 1098 892 820 892 1098

Dep. var: Patent Concor Politic Goveff Requa Law Voice

INST*FDI 0.001 0.021* 0.003 0.008 0.001 0.010

International Economics 157 (2019) 134–169

INSTnew*FDI 0.002 0.002 0.003 0.003

International Economics 157 (2019) 134–169

GDPpc 202.92*** 0.000 0.80 0.82 1.949 2.11 2.2 2.36

Dep. Var: Basic model Trade FDI

International Economics 157 (2019) 134–169

Dep. Var: patent Concor Goveff Politic

International Economics 157 (2019) 134–169

Dep. Var: Requa Law Voice

Year effect Yes Yes Yes

International Economics 157 (2019) 134–169

Dep. Var: Concor Goveff Politic

International Economics 157 (2019) 134–169

Dep. Var: Requa Law Voice

International Economics 157 (2019) 134–169

Dep. Var: Concor Goveff Politic

International Economics 157 (2019) 134–169

Dep. Var: Requa Law Voice

International Economics 157 (2019) 134–169

In models Table A8 Table A9 Table A10

1997 0.01 0.02 0.01

Table A15 (continued )

In models Table A8 Table A9 Table A10

Dep. Var: patent Basic Trade FDI

Country effect Yes Yes Yes

International Economics 157 (2019) 134–169

Dep. Var: patent Concor Goveff Politic

International Economics 157 (2019) 134–169

Year effect Yes Yes Yes

International Economics 157 (2019) 134–169

Dep. Var: patent Concor.Trade Concor.Trade and Concor.FDI

[0.005] [0.003] [0.003] [0.003] [0.005]

Patent (1) 0.9159* [0.0036] 0.8409* [0.0048] 0.8565*** [0.0049]

Patent (1) 0.8077* 0.7596* 0.8410* 0.8008* 0.8117* 0.8176*

INSTFDI 0.001 0.021 0.003 0.008 0.001 0.010