The Effect of Innovation Performance on Dimensions of the Globalization

Abstract

Developments such as deployment of local and nationalistic perspectives to a broader outlook of an interconnected and interdependent world with free transfer of capital, goods, and services across national frontiers are associated with Globalization phenomenon. Although globalization is not new it is used more commonly and associated with a new subject every day. Globalization is frequently associated with economic growth via expanding international trade, cross-border transfer of financial resources, increased foreign investments, growing multinational enterprises and joint ventures. However this new world of globalization resulted in greater international competition for the countries and obliged them to be innovative in order to remain at the forefront in the global competition environment. It is generally accepted that there is a strong relationship between innovation and globalization. However globalization doesn?t influence high income and low income countries same way. Furthermore different dimensions of globalization is affected by the innovation in a different way. In this paper innovation performance of the countries and the relationship between the dimension of globalization is investigated. The data is extracted from INSEAD Innovation Indexes and KOF Globalization Index and tested using panel regression analysis. The results have shown that except political globalization the relation connection between innovation and economic and social dimensions of globalization is significant and positive.