The Impact of Economic Freedom, Innovation, and Exports on Growth: An Empirical Study on Emerging Economies

Doğan, Fırat Cem

doi:2026.41.1.115

The Journal of Economic Integration 2026 March;41(1) :115-135.
DOI: https://doi.org/10.11130/jei.2025022

The Impact of Economic Freedom, Innovation, and Exports on Growth: An Empirical Study on Emerging Economies

Faculty of Economics, Administrative and Social Sciences, Department of Banking and Insurance, Hasan Kalyoncu University,Gaziantep, Türkiye

Corresponding Author: Fırat Cem Doğan ,Email: fcem.dogan@hku.edu.tr

ABSTRACT

Sustainable economic growth in emerging economies is essential for achieving long-term development and global competitiveness. Yet, these economies often face structural barriers arising from institutional weaknesses, limited innovation capacity, and external sector vulnerabilities. This study aims to provide a comprehensive empirical assessment of how economic freedom, innovation capacity, exports, R&D expenditures, and patent applications influence economic growth in 17 emerging economies between 2005 and 2024. The analysis is grounded in institutional theory, endogenous growth models, and the export-led growth hypothesis, which jointly explain how institutions, technology, and openness shape growth dynamics. Using panel data techniques Dynamic OLS (DOLS) and Fully Modified OLS (FMOLS) the study estimates long-run cointegration relationships while addressing endogeneity, serial correlation, and potential unbalanced panel issues. The results reveal that economic freedom, innovation, and exports are the most significant drivers of sustainable growth, enhancing market efficiency, productivity, and global integration. R&D expenditures contribute positively but heterogeneously across countries, whereas patent applications have a weaker yet positive effect. A robustness test based on a balanced sub-panel (2008-2022) confirms the stability of the results. These findings emphasize that institutional reforms enhancing economic freedom, policies promoting innovation and R&D productivity, and strategies deepening trade openness are essential for sustaining long-term economic growth. Strengthening intellectual property rights and fostering innovation ecosystems are equally critical to converting technological progress into tangible economic outcomes.

JEL Classification

031:
F43: Economic Growth of Open Economies
P52: Comparative Studies of Particular Economies