Page 295 - ES 2020-21_Volume-1-2 [28-01-21]

278 Economic Survey 2020-21 Volume 1

Table 1 below report results for the following form of FE regression:
Log Innovation Output rank = β Log Institutions rank + β Log HCR rank + β Log Infrastructure
2
1
3
rank + β Log Market Sophistication rank + β Log Business Sophistication rank + Controls for
4
5
GDP/ GDP per capita/ population (depending on Model 1-5)
Table 2 below report results for the following form of FE regression:
Log Knowledge & Technology Output rank = β Log Institutions rank + β Log HCR rank + β Log
2
3
1
Infrastructure rank + β Log Market Sophistication rank + β Log Business Sophistication rank +
5
4
Controls for GDP/ GDP per capita/ population (depending on Model 1-5)
Table 3 below report results for the following form of FE regression:
Log Creative Output rank = β Log Institutions rank + β Log HCR rank + β Log Infrastructure
2
1
3
rank + β Log Market Sophistication rank + β Log Business Sophistication rank + Controls for
5
4
GDP/ GDP per capita/ population (depending on Model 1-5)
8.51 Table 1 reports panel Fixed Effects (FE) regression results for dependant variable Log
Innovation Output rank for five models with different independent variables - Log input
pillars, Log GDP, Log GDP per capita and Log population. Among the input pillars, it shows
that Log Institutions rank and Log Business Sophistication rank is highly significant and
positively correlated with Log Innovation Output rank, controlling for other pillars, income
and population. Log population, when included, was found significant and positively correlated
with Log Innovation Output rank, controlling for other pillars and income. This suggests that
improvements in institutions and business sophistication could lead to higher innovation output
performance.
Table 1: Panel Regression Results: Fixed Effects

Dependant Variable: Log Innovation Output rank

(1) (2) (3) (4) (5)
VARIABLES Model 1 Model 2 Model 3 Model 4 Model 5
Log Institutions rank 0.175*** 0.173*** 0.162*** 0.168*** 0.162***

(0.0536) (0.0549) (0.0537) (0.0546) (0.0537)
Log HCR rank -0.0099 -0.0103 -0.0043 -0.0101 -0.0043
(0.0376) (0.0378) (0.0375) (0.0377) (0.0375)

Log Infrastructure rank -0.0179 -0.0192 -0.0226 -0.0219 -0.0227

(0.0334) (0.0329) (0.0323) (0.0326) (0.0323)
Log Market Sophistication 0.0106 0.0107 0.0149 0.0116 0.0149
rank (0.0325) (0.0325) (0.0324) (0.0324) (0.0324)

Log Business Sophistication 0.0998*** 0.0993*** 0.0934*** 0.0975*** 0.0933***
rank (0.0339) (0.0343) (0.0342) (0.0344) (0.0342)

Log GDP (PPP)^ -0.0187 -0.112
(0.0604) (0.0728)