Innovation spillovers, economic growth and role of absorptive ability
摘要
Research and Development (R&D) based economic sustainability is the prime area of concern in endogenous growth framework to solve the problem of production inefficiency for attaining the economic stability. The high Total Factor Productivity (TFP) growth can be attained through green technology, reverse engineering, ‘learning by doing’ and artificial intelligence. The foreign and domestic green R&D innovation adoption and its spillovers are relying on producers’ willingness to opt the green financing practices and knowledge capital. The current research aims to address a critical literature gap by exploring the intricate linkages between green R&D spillovers, innovation, and green productivity growth in Pakistan. It investigates the mechanisms through which long-term R&D spillovers foster sustainable green growth, while distinguishing the relative impact of domestic and foreign spillovers on green innovation adoption. Further, the study quantifies the absorptive capacity of Pakistan’s work force and outlines pathways to enhance labor efficiency for advancing sustainable development. The time series data covering the period of 1972 to 2022 is used for the quantitative analysis. The Translog and Cobb Douglas Production Functions are used to measure the TFP growth and Autoregressive Distributive Lagged (ARDL) Model is applied for empirical analysis. The results indicate presence of foreign and domestic R&D innovation spillovers and adoption in Pakistan with poor absorptive ability. Moreover, it is observed that foreign R&D spillovers have an affirmative role in TFP growth as compared to domestic R&D. Based on the empirical findings, government should focus on sustainable policies related to local R&D, R&D spillovers with sufficient and sustainable R&D expenditures, their availability and accessibility of innovation to boost the resource efficacy for higher TFP growth. In the similar vein, the implementation of extension services to educate the laborers for adoption of innovation, innovative technology, and artificial intelligence (AI) to attain sustainable productivity should also be emphasized.