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Effects of economic clusters, FDI and R&D on Innovation: Developing Countries in European Monetary Union Example

This study investigates the impact of clusters, FDI, RD, and GDP per capita on innovation. Using a unique panel dataset obtained from eight developing countries with similar innovation levels that are in and out of economic clusters from 2001-2014. The empirical results show that dynamic (uncountable) effects of clusters are not statistically significant on innovation, but static effects (countable) are. Therefore, clusters are effective for developing countries on trade but not innovation directly that developing country should increase trade for innovation spillover by moderation effect of being in economic unions.