This paper investigates how innovation potential of a country contributes to avoid or escape the middle income trap. We measure innovation potentials of 77 countries from 1975 to 2010 from patent data. Then, we test whether indigenous innovative efforts or foreign ones help avoid and escape...

Recent trade literature highlights the importance of export diversification and upgrading in fostering faster and sustainable economic growth. This study investigates the impact of FDI inflow and stock on the level of export diversification and sophistication in host country's export baskets. By...