Calculating the Knowledge-Based Economy in 54 Selected Countries

Authors

Faculty of Economics, University of Tehran, Tehran, Iran

Abstract

This research attempts to measure the knowledge economy by Combining Inductive and Deductive Approaches. In this essay, a comparison between different perspectives on the knowledge economy was done, and then the knowledge economy is defined as “achieving higher productivity levels by utilizing knowledge”. After examining factors affecting productivity, these factors are classified into four categories including 1- Governance quality and business environment; 2- Quality of information and communication infrastructure; 3- Economic freedom and international relations quality; and 4- Level of knowledge and innovation. Subsequently, by calculating the productivity level for 54 countries and dividing the productivity of each country into these four factors above, the contribution of the fourth factor, and the role of knowledge and innovation in the knowledge economy were calculated and presented as the indicator of the knowledge economy. In each of these four categories, three or more indicators were placed, and fifteen indicators were used. The data of the 15 indicators were extracted in a panel containing information from 54 countries between 2000 and 2016. The weight of different productivity factors was estimated using the Bayesian Panel method. Results of the ranking of the selected countries indicate that the United States, Japan, and Germany are leading countries in a knowledge-based economy.

Keywords

References

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Iranian Economic Review
Volume 25, Issue 3
September 2021
Pages 567-585

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