Panel Causality Analysis of the Relationship among the Rule of Law, Technological Advances, Competitiveness, and Value-Added

Dogan Kesap () and Ali Riza Sandalcilar
Additional contact information
Dogan Kesap: Recep Tayyip Erdogan University, Faculty of Economics and Administrative Sciences, Department of Economics, Rize, Turkiye
Ali Riza Sandalcilar: Recep Tayyip Erdogan University, Faculty of Economics and Administrative Sciences, Department of Economics, Rize, Turkiye

Istanbul Journal of Economics-Istanbul Iktisat Dergisi, 2024, vol. 73, issue 74-1, 159-191.

Abstract: The status of countries within the global value chain varies depending on the importance of national production capabilities in the global economy. From this perspective, there is a need for a value-added production approach that focuses on innovation and competitiveness. Technological advances and institutions are considered to play a significant role in transforming the economy towards an innovation-driven one to meet these needs. The aim of this paper is to investigate the relationship among technological advances, the rule of law as a proxy for institutions, value-added production, and competitiveness in a way that reflects crosscountry divergence. Through an analysis employed independently of countries’ existing levels of development, it will be possible to evaluate whether the factors associated with institutions and innovation can produce similar results in all circumstances and for each country. In this context, a panel causality analysis that considers cross-sectional heterogeneity is employed. The analysis shows bidirectional causality between the variables, except for value-added to the rule of law. However, the results also support the existence of cross-country divergence. These findings suggest that future policy plans should be designed to consider the multidimensional nature of country-specific factors, alongside technological advances and the rule of law, and to ensure the integration of both national and international economic objectives.

Keywords: Technological advance; The rule of law; Competitiveness; Value-Added production JEL Classification: F10; P48; O32; O47 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://cdn.istanbul.edu.tr/file/JTA6CLJ8T5/98235E88A6D04BCABB83FB03F14BD657 (application/pdf)
https://iupress.istanbul.edu.tr/tr/journal/ije/art ... ness-and-value-added (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ist:journl:v:73:y:2024:i:1:p:159-191.

DOI: 10.26650/ISTJECON2023-1298039

Access Statistics for this article

Istanbul Journal of Economics-Istanbul Iktisat Dergisi is currently edited by Gökhan Karabulut

More articles in Istanbul Journal of Economics-Istanbul Iktisat Dergisi from Istanbul University, Faculty of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Istanbul University Press Operational Team (Ertuğrul YAŞAR) ().