Investigation of the mutual effect of knowledge-based economy and TFP and their relationship:  Case study on developed, emerging and developing countries

Mehrabani, Fatemeh; Ghobadi, Soghra; Rezaeeyan, Ali

Investigation of the mutual effect of knowledge-based economy and TFP and their relationship: Case study on developed, emerging and developing countries

Authors

¹ Assistant professor at the college of economics and management; Islamic Azad University, Ahvaz branch

² Faculty member at the college of economics and management; Islamic Azad University, Ahvaz branch

Abstract

Today, productivity is known as the engine of economic growth. But improving productivity depends on knowledge based economy. By using panel data econometric methods in a sample consisting of Iran, some developed and developing countries for the period 1995-2012, consequently, the objectives of the present study are: (1). Examination and comparison of the position of knowledge based economy in selected countries, (2). investigation the effect of knowledge based economy on the total factor productivity in the selected sample, (3). Evaluation of the causality between total factor productivity and knowledge based economy in selected countries.
The results of this study indicate the fact that the position of knowledge based economy and its indicator in Iran in comparison with other countries in the sample is not desirable at all. Furthermore, there is a significant positive relationship between knowledge based economy and total factor productivity. On the other hand our review shows that there is a one-way causality relationship between total factor productivity and knowledge based economy (from Knowledge Based Economy to efficiency).

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