National innovation system and external constraint on growth

Vol. 36 No. 4 (2016)

Oct-Dec / 2016
Published October 1, 2016

How to Cite

da Cunha Resende, Marco Flávio, and Daniela Almeida Raposo Torres. 2016. “National Innovation System and External Constraint on Growth”. Brazilian Journal of Political Economy 36 (4), 748-68.

National innovation system and external constraint on growth

Marco Flávio da Cunha Resende
Professor Associado do Departamento de Economia da UFMG e do CEDE PLAR, Brasil,
Daniela Almeida Raposo Torres
Professora Adjunta do Departamento de Economia da Universidade Federal de São João Del -Rei (UFSJ), Brasil,
Brazilian Journal of Political Economy, Vol. 36 No. 4 (2016), Oct-Dec / 2016, Pages 748-768


According to the literature on export-led growth models differences in income elasticities of demand for imports and exports among countries bring about different degrees of external constraint on growth. However, there is not in this literature an explanation that uses the Evolutionary concept of National Innovation System (NIS) that shows why there are differences in income elasticities among countries. Moreover, there is not a consensus about the exogenicity of the elasticities. Some authors highlight the high level of income elasticity of demand for exports in sectors with high level of technological intensity. However these authors seem to not explain the motive for this. The aim of this paper is to theoretically show the causal relation between an economy’s NIS, its income elasticities and its Current Account performance. It also aims to show the role of NIS in the exogeinicity/endogeinicity of the income elasticities. Empirical evidence and a Granger Causality Test are presented and do not reject the core argument of the paper.

JEL Classification: E12; F43; O44.

Keywords: Technological progress, income elasticities, economic growth