developing

The main challenge of developing countries is to achieve growth and development. The extant economic growth literature illustrates that the quality of institutions and social infrastructure are important factors that influence the economic growth and development. Accordingly, many analysts believe that regarding such institutional factors, the rule of law is one of the most prominent aspects necessary for a system to achieve investment and economic growth. This study aims to investigate the impact of institutional variables on economic growth in developed and developing countries for the period 1995-2015. To this end, Panel Smooth Transition Regression (PSTR) model has been used. The estimation results of model reject the linearity hypothesis, and estimate a model with two regimes that proposes a threshold at institutional quality indicators of 0.1627 and 0.625 for the countries under study. It is demonstrated that the factor of rule of law has a positive impact on economic growth; however, this impact is higher in the second regime. The results also show that in both regimes, the variables of institutional quality indices, economic freedom, human capital and other control variables have a positive effect on economic growth. Moreover, the intensity of the variables influencing the changes in both groups intensifies when institutional quality improves.

Research and development (R&D) as one of the inputs of innovation can increase firm's productivity through improving product quality or reducing average cost of production, and can have a positive effect on firm's profitability. So, the country's economic success, is that manufacturing firms that are innovative and produce goods that have the power to compete with similar foreign goods. Therefore, the aim of this study is to answer the question of what factors determine the firm's investment in research and development. For this purpose, both developed and developing countries have been selected to investigate determinants of their business enterprise research and development (BERD based on panel data approach using the 2SLS (two-stage least squares) method during the period 1995-2012. In this study, endogeneity of intellectual property rights are considered. Estimation results indicate a positive and significant effect of intellectual property rights, and university R&D intensity on business enterprise research and development (BERD) intensity. Access to internal funds variable has positive effect that is measured with domestic savings to GDP ratio with one period lag, which is significant only in developed countries. Also, the exports of high-tech variable has positive effect and significant for both groups of countries.