Technological Knowledge Gaps: Implications for the Economic Performance and Wellbeing of Developing and Emerging Market Economies

Abstract

A key phenomenon that is pertinent to comprehending the economic development of developing and emerging market economies in the twenty-first century is the knowledge economy. This study aims to contribute to the extant literature from two main perspectives. First, we examine the correlation and nature of a relationship between the KEI and the economic performance of 66 developing and emerging market economies. Second, we make a general statement about Atkinson’s wellbeing implications of technological gaps. We use pooled OLS single-equation and two-equation system estimators. Our results confirm a relationship, but they do not reject the null hypothesis that technological knowledge is correlated with economic performance as opposed to the alternative. The results also show massive gains for this group from closing existing knowledge gaps, suggesting that these countries should ensure that their technological knowledge promotes economic performance and then close existing gaps. The evidence shows that improving the pillars of KEI will be central to strengthening technological knowledge and closing existing technological disparities, both essential for wellbeing-enhancing economic performance. The study’s novel contribution lies in the its examination of the nexus between knowledge economy (KE) and the per capita economic prosperity in developing and emerging market economies (DEMEs) in order to understand the growth effects of unequally distributed technological knowledge (technological divide) on the economic performance of DEMEs.