Evidence on the Role of Innovation and Creative Industries Towards Achieving a Sustainable Society

Document Type : RESEARCH PAPER

Authors

1 M.Sc. in Theoretical Economics, Department of Economics, Faculty of Humanities and Social Sciences, University of Kurdistan, Sanandaj, Iran.

2 Associate Professor, Department of Economics, University of Kurdistan, Sanandaj, Iran.

Abstract

This research endeavors to examine the influence exerted by two pivotal factors—namely, innovation and creative industries—upon the sustainable society index across a sample of chosen nations during 2013-2020. To accomplish this objective, the panel smooth transition regression methodology is employed, with each of the aforementioned variables being scrutinized within its own distinct analytical framework. In the both specifications, the initial lag of the dependent variable, representing the sustainable society index, serves as the threshold inducing transition variable. Empirical evidence derived from the estimations confirms the existence of nonlinear interdependencies among the constructs under consideration in both configurations. According to the optimal model selection criteria, the specification linking the sustainable society index to innovation incorporates two transition functions alongside a single threshold value; conversely, the model pertaining to creative industries encompasses two transition functions and a dual threshold structure. The adjustment pace within the first equation displays a comparatively gradual and gentle pattern, whereas in the second equation, the shift toward the second regime unfolds with considerable rapidity, though the progression into the third regime materializes at a notably slower rate. The outcomes reveal that the innovation exerts a favorable influence on the sustainable society index during the initial regime, yet its coefficient turns adverse across the subsequent two regimes—implying that improvements in the sustainable society metric progressively weaken the beneficial contribution of the innovation, ultimately reversing its sign. By contrast, the creative industries sector consistently demonstrates a dampening effect on the sustainable society index throughout all the three identified regimes.

Keywords

References

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