Globalization and Technological Innovation in Emerging Economies: Examining Non-Linear Threshold Effects and the Moderating Roles of Institutional Quality and Human Capital

Abstract

Despite the significant role of globalization in driving economic growth, innovation, and technological adoption, limited research has explored its influence on technological innovation.To address these research gaps, this study investigates the moderating impact of institutional quality and human capital in the relationship between globalization and technological innovation.This study employs the systemic innovation theory framework to analyze the direct and moderating relationships using panel data from Eurostat for forty-seven sub-Saharan African countries from 2000 to 2023 and the panel threshold estimator.The results of the static and dynamic threshold effects reveal a non-linear association between globalization and technological innovation.We further find that institutional quality negatively moderates the relationship between globalization and technological innovation such that any increase in institutional quality marginally reduces the impact of globalization on technological innovation.Finally, we find that human capital negatively moderates the relationship between globalization and technological innovation, such that any increase in human capital marginally reduces the impact of globalization on technological innovation.The main practical implication from our finding is that for globalization to significantly impact technological innovation, these countries must invest in absorptive capacities by improving education, infrastructure, and institutional quality.