The Technological Growth Paradox Asymmetric Impacts of Innovation and High-tech Trade Across the North and South

Innovation and technological advancement are widely recognized as key drivers of structural transformation in the Global North, emphasized by well-established national innovation systems. However, empirical literature on how these dynamics operate within the Global South remains fragmented. This study examines the asymmetric effects of innovation and high-tech trade on growth indicators using secondary data from 2000 to 2023 for two groups of countries: 22 in the Global North and 20 in the Global South. Using pooled ordinary least squares, the study estimates the effects of high-technology exports, research and development (R&D) expenditure and total patent applications on three macroeconomic dimensions: absolute GDP, GDP growth and GDP per capita growth. Following diagnostic robustness checks, including the Hausman specification test, panel fixed-effects and random-effects models were estimated. The empirical findings confirm sharp structural variations between the two regions. In the Global North, high-technology exports and R&D expenditure consistently show statistically significant impacts across all three economic growth indicators, validating frontier-led endogenous growth theory. Conversely, the Global South exhibits technological capability failure. In these latecomer economies, the impacts of high-technology exports and R&D expenditures on economic growth are statistically insignificant, reflecting low absorptive capacity and global value chain assembly traps. Notably, innovation output, proxied by total patent applications, has no statistically significant effect on growth indicators in either the Global North or Global South samples. This cross-regional insignificance challenges conventional assumptions, suggesting that formal intellectual property registration does not automatically translate into immediate macroeconomic returns without localized industrial integration.