South Asian universities play a crucial role in driving economic development through research and innovation. However, these institutions often face challenges that hinder their productivity in these areas. To address these challenges, this study aims to understand and examine the factors enhancing research and innovation productivity in universities across South Asian countries, specifically Bangladesh, India, Nepal, Pakistan, and Sri Lanka. Using panel data from 2009 to 2021, the study employs the newly developed dynamic common correlated effects (DCCE) approach by Chudik and Pesaran (2015a). The results revealed that the factors found to be enriching research productivity, though the impact is negligible, are patent rights, funding for tertiary education, information technology, and publications. However, tertiary school enrollment is not a significant factor. On the other hand, for innovation productivity, the influencing factors with a negligible impact are patent rights, funding for tertiary education, and information technology. In this case, neither tertiary school enrollment nor publications play a significant role. Furthermore, the research productivity of the universities in South Asian countries is negligibly stimulating the countries’ GDP per capita, while the innovation productivity of the universities is not. Moreover, examining these relations using models such as mean group (MG), pooled mean group (PMG), and augmented mean group (AMG) can produce misleading results due to cross-sectional dependence among the units. Nonetheless, PMG outperformed AMG, followed by MG. Policy recommendations were suggested based on the findings.
