The Assessment of Impacts of Economic Openness on Knowledge-based Economy: A Spatial Econometric Approach

Internationally, the impact of innovation and creativity on competitiveness degree of firms has been increasingly enhanced even daily. Therefore, emphasizing on knowledge-based economy as well as the development of new high tech products has been taken priority over macro policy makings across the world. It is noteworthy to highlight that innovation can play a major role in economic growth of different countries through the development of new markets. This article aims to investigate the impact of economic openness on knowledge-based economy through using spatial econometric approach based on Romer’s indigenous growth model for Iranian economy and selected commercial partners (including 14 developed and developing countries) during 1995-2013. The results show that significant variables such as human development, research and development (R&D) and economic openness degree on knowledge-based economy have had considerable effects on the innovation. Thus, it is proposed that these countries, particularly, Iran get clear realization about their own economic structures in a bid to choose their high-tech commercial partners. It is further suggested that targeted modification of tariffs for imported capital goods can pave the way to import knowledge-intensive goods. Also, the nationalization of their imported high-technologies as well as product-oriented innovations should be taken into account.