Neo-Schumpeterian Growth: Political and Religious Stability Matter

Nathan Schild, Jamel Saadaoui and Patrick Rondé

Working Papers of BETA from Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg

Abstract: The purpose of this paper is to re-investigate one of the most prominent predictions of Neo-Schumpeterian growth theory—namely, that economic development is augmented by investments in R&D—by stressing that such a prediction applies only when conditional on institutional and socio-cultural stability. To achieve this aim, an unbalanced panel data set of 23 OECD members and accession candidate countries from 1998 to 2018 is employed to estimate a Type III growth equation extended by interaction terms between R&D intensity and government/religious stability. Using a full set of macro controls and a full set of country-specific fixed effects, it is found that the marginal association of R&D and economic development strictly increases with institutional stability. Quantitatively, a 1-standard-deviation increase in R&D intensity is found to have a negligible association with GDP per capita when government stability is low but raises GDP per capita by up to 13.3% when government stability is high. Moreover, a symmetric relation is found such that a 1-standard-deviation increase in R&D intensity raises GDP per capita by up to 12.9% when religious stability is high. In contrast, the unconditional association between R&D and economic development is found to be small and statistically indistinguishable from 0 when religious stability is low.

Keywords: R&D intensity; economic development; neo-Schumpeterian growth; institutions; government stability; religious stability; technology diffusion; OECD members and candidates panel. (search for similar items in EconPapers)
JEL-codes: C23 O30 O40 O43 P16 Z12 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ulp:sbbeta:2026-04

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