Research output and economic growth in technological laggard contexts: a longitudinal analysis (1980-2019) by type of research

The literature on the impact of research output (RO) on economic growth (EG) has been rapidly expanding. However, the single growth processes of technological laggard countries and the mediating roles of human capital (HC) and structural change have been overlooked. Based on cointegration analyses and Granger causality tests over 40 years (1980-2019) for Portugal, five results are worth highlighting: (1) in the short run, RO is critical to promote EG; (2) the long run relation between RO and EG is more complex, being positive and significant in the case of global and research fields that resemble capital goods (Life, Physical, Engineering & Technology, and Social Sciences), and negative in the case of research fields that resemble final goods (Clinical & Pre-Clinical Health, and Arts & Humanities); (3) existence of important short run mismatches between HC and scientific production, with the former mitigating the positive impact of the latter on EG; (4) in the long run, such mismatches are only apparent for 'general' HC (years of schooling of the population 25 + years), with the positive association between RO and EG being enhanced by increases in 'specialized' HC (number of R&D researchers); (5) structural change processes favouring industry amplify the positive (long-run) association and (short-run) impact of RO on EG. Such results robustly suggest that even in technologically laggard contexts, scientific production is critical for economic growth, especially when aligned with changes in sectoral composition that favour industry.