The Effects of Knowledge-Based Economy on Economic Growth

The spread of information and communication technology and its effects on information and data transfer, in association with high quality education, a favorable economic regime, and innovation in economy, has played an indispensable role in sustainable growth and development. This study is conducted to identify the role and effect of knowledge-based economy on economic growth within the context of existing economic literature. In this line, relying on principles of economic growth models, a model is estimated in the framework of a panel data model, considering the knowledge-based economy index of 139 selected countries during period 2010 to 2014. This research focuses not only on basic production inputs, i.e. capital and labor, but also on social capital and knowledge-based economy as two of the most important factors of production, and it show the role of social capital in economic growth. Our results show a positive and significant effect of the knowledge-based economy index on economic growth among the set of selected countries.
JEL Classification: O47, O57, L96, H54.