Patent, Education, Human Capital, and Economic Growth in Scandinavian Countries: a Dynamic Panel CS-ARDL Analysis

The central question which this study should answer is: how does human capital, education, and patent affect the growth of an economy? Therefore, this article aims to verify whether human capital, education, and patents positively affect economic growth in Scandinavian countries during the period 1990 to 2019. For this purpose, we use Westerlund (2007) Panel cointegration tests and Cross-Sectionally Augmented Autoregressive Distributed Lag (CS-ARDL) model with pooled mean group (PMG) estimators. We also apply the Dumitrescu and Hurlin (2012) Granger non-causality tests. This study is significant in two ways. Firstly, based on endogenous growth theory and Quadruple Helix model, we provide a theoretical analysis of the effects of human capital use, innovative activity, and patent protection, on economic growth. Secondly, the article makes an empirical contribution for a better understanding of the modes of economic growth based on knowledge. The methodology used considers both cross-sectional dependence and cross-country heterogeneity. The empirical results indicate a stable long-run cointegrating relationship between education, life expectancy at birth, population, gross fixed capital formation, and growth. Our empirical results also show that the number of patents in Scandinavian countries has a statistically significantly positive effect on economic growth. Also, we have marked a negative effect of Expenditure on Education on economic growth. Understanding and achieving sustainable growth based on innovation and knowledge are possible through the triple helix approach. This approach can be described as a framework which allows to better understand interactions between universities, governments, and industries. Our results imply that further work is needed to integrate the relatively recent concepts of Triple/Quadruple/Quintuple Helix at the level of analysis the interactions between patents, education, human capital, and growth.