Purpose The role of innovation and technology in national development strategy is a spotlight topic not only in academic but also in policy making. This study aims to identify the impact of innovation and technological development on national competitiveness with a study sample of 76 countries from 2007 to 2021. Design/methodology/approach Porter’s Diamond Model is used to establish the analytical framework. In addition, aspects representing national competitiveness are included into the empirical models for filling current research gaps. The generalized method of moments is used to address potential endogeneity and dynamic effects. For further analysis, the total sample is divided into three sub-samples: 33 developed countries in the organisation for economic co-operation and development (OECD) group, 23 upper-middle-income countries, and 20 lower-middle-income countries, to explore differences in the estimated results across the models. Findings The findings reveal that innovation and technological development have positive impacts on national competitiveness by supporting economic growth, productivity, trade balance as well as budget balance. These effects are robust and statistically significant in both the total sample and the sub-samples. In addition, improvements in human capital and the efficiency of public administration are critical to enhancing national competitiveness. Practical implications The results suggest that policymakers should implement policies that encourage innovation activities and investment in new technologies to achieve higher levels of national competitiveness. Besides, countries need to allocate more resources to infrastructure, the public administration system and education networks. Increasing gross national income is necessary for gaining a competitive advantage. Originality/value The link between innovation, technological development and countries’ competitiveness is unclear and weak, especially at the international level. Unlike previous studies, four critical macroeconomic variables are used as dependent variables: productivity, economic growth, trade balance and budget balance. Therefore, countries’ competitiveness can be analyzed more deeply, yielding more comprehensive results. Besides, this study significantly expands the current literature on national competitiveness by employing various empirical models across global as well as sub-samples by continent and income. The results robustly assert that innovation and technological development are the primary drivers of increased national competitiveness.
Tùng et al. (Fri,) studied this question.