Impact of economic growth on scientific production in Latin America and the Caribbean based on panel data analysis

Introduction

The Organization for Economic Cooperation and Development (OECD) reports the entry into the era of knowledge-based economies, which are strictly based on technological innovation, the use of knowledge and information and communication technologies.¹ As a result, science and technology have gained great relevance to the current economy. Throughout the years, progress in innovation and research has reached its highest peak, both in scientific productivity and in its complexity^2,3 and the idea that the scientific and technological progress of a country is the basis of economic dynamics, production growth and its expansion, is becoming more and more common and more accepted and promoted by international organizations oriented to economic development.⁴ However, with the presence of COVID-19, this progress and funding have collapsed.⁵ There were sharp declines in economic growth throughout the world during the first half of 2020. Several major investment banks projected negative global economic growth for 2020 of between -1% and -3% of gross domestic product (GDP), but there was a high degree of uncertainty in these figures.⁶

Between January 2019 and January 2020, growth of 2% was expected, but the latest estimates indicate that growth was below 1%. These estimates have changed due to the COVID-19 pandemic. Global stock markets declined as investors began to worry about the economic repercussions of the COVID-19 pandemic. Gross Domestic Product declined, and this pandemic cost the world more than $2 trillion by the end of 2020.⁷ Although many Latin American countries have seen their economies grow over the last five years, the pandemic has been the catalyst for many sectors to explore ways to overcome it through innovation. As a result, a number of sectors have made significant progress, achieving, among other things, an important economic revival.⁸

Governments establish policies that seek to guide the development of their nations, face the structural difficulties that hinder growth options, generate opportunities in the different sectors of society, distribute the wealth generated and thus seek to achieve the highest goals that society has set for itself.⁹ However, in Latin America, government financial support for research is insufficient and has generated controversy by requiring researchers to publish in high impact journals.¹⁰

The allocation of resources for research in Latin America is greatly disproportionate to that of developed countries, and it is evident that in Bolivia, El Salvador, Guatemala, Paraguay and Peru, the allocation of resources for research and development through public funding and private companies is not a priority for governments.¹⁰ Peru is the Latin American country with the fewest resources for research development, specifically compared with the other members of the Pacific Alliance, which also includes Chile, Colombia and Mexico. This is reflected in the low Peruvian representation in the scientific production of the region, where only 1.04% of the scientific publications are by Peruvian authors.¹¹

Regarding the number of publications, Peru has had a slight but continuous increase in spending as a percentage of GDP since 2011 and thus achieved its best result in the last years of the examined period, with 0.12% per year. Consequently, in 2017, Peru ranked seventh in scientific production in Latin America with more than 2700 studies. Mexico published more than 23,000 documents that year, and Argentina published more than 13,000 studies with considerably higher number of researchers.¹²

Like the rest of the world, in Latin America we must face the COVID-19 pandemic, which highlights the need to invest more in research. It is necessary to have a measurement system that allows us to evaluate the number of scientific publications and the impact of economic growth. These key factors involve the adoption of a solid long-term research policy focused on the allocation of economic resources for research.

Research and development expenditures include current and capital expenditures (public and private) on creative work undertaken to improve knowledge, including knowledge about humanity, culture and society and the use of knowledge for new applications. Research and development encompass basic research, applied research and experimental development. This seeks to model a scientific and technological culture that involves the collective production of scientific knowledge, interdisciplinary work and the participation of all actors in the field of scientific-technological development of the country.¹³

However, little is known about the impact of economic growth on the number of scientific publications in Latin American and Caribbean countries. Our study identifies the research problem by asking the following question: what is the impact of the GDP on the number of scientific publications in Latin American and Caribbean countries?

The result of low GDP investment in research in Latin America and the Caribbean is detrimental to innovation, compromising the development of different sectors of the economy, one of the greatest competitive advantages that one country can have over another.¹⁴ If a country is interested in improving its competitiveness, it is essential to greatly increase investment in research and development.¹⁵ Research aims to create knowledge, strengthen economic growth and implement public policies and social development in countries as a result of their economic development.¹⁶

The policies promoted by governments around the world for the financial support of research have not only boosted the resources available to universities, but have also boosted their academic quality. Evidence of this is the number of researchers working in Science, Technology and Innovation (STI) areas, as there is a record of 7.8 million scientists and engineers working in STI production. This represents an increase of 21% with respect to the number registered by UNESCO in 2007.¹⁷ However, in Latin America, the promotion of research in national strategies to improve education, national development and scientific production led by researchers in the different countries of the region remains below the expected values, showing a high dependence on international collaboration to achieve recognition in the international scientific community.¹⁸

The connection between science and economic factors, such as production factors and the construction of the social fabric, was studied by Quinde-Rosales et al.⁹ These results allowed us to establish a model that demonstrated the bidirectional nature of the GDP and expenditures in science and technology, enabling us to establish that the differences in the two variables are stable and that the expenditure generated by science and technology depends on the GDP.

The study by Giraldo-Gutierrez et al.¹⁹ analyzed the impact of science, technology and innovation (STI) policies on the production and appropriation of knowledge. The results showed that despite the low investment in STI, scientific production has been increasing due to factors such as the creation of research centers and the development of research. Santina and Caregnato²⁰ showed that in different countries, research behaves unevenly. A few countries focus on financial resources and human resources at the internal level and external levels of natural resources and the wide diversity in the integrations of different countries to strengthen research in the countries.

Cepeda Avila et al.²¹ indicate that scientific production has grown over the years in different Latin American countries despite the limitations; however, compared to developed countries, scientific production remains low. The authors’ explanation for the increase in scientific production is that an increasing number of researchers carry out projects that culminate in publications, although their financial resources are quite scarce. Pérez and Lutsak-Yaroslava²² indicate that scientific production in Latin America is growing and consolidating, as indicated by the increase in publications in high impact journals and the establishment of networks that stimulate the advancement of knowledge.

Vargas-Merino and Rodríguez²³ indicate that it is important to continue to increase production capacity and maintain outstanding performance in terms of impact and excellence. The real challenges are to achieve recognition of production led by researchers in these countries, generate true internal capacities for the development of quality research and decrease dependence on international collaboration.

In view of the above, this research aimed to evaluate the impact of GDP on the number of scientific publications in Latin American and Caribbean countries under pre-pandemic conditions. In this way, it will be possible to determine in the future the countries in which the pandemic had a greater impact on scientific production. Therefore, the objective of our study was to estimate the impact of economic growth on scientific production, measured as the variation in gross domestic product and the number of scientific publications in Latin American and Caribbean countries.

Methods

Results

The scientific production in 18 countries of Latin America and the Caribbean, in the period 2000-2018, is shown in Figure 1. This shows that Brazil, Mexico and Argentina have been the countries with the most production, defined as the number of articles published (in neperian logarithms).²⁷ The X axis corresponds to country identification numbers, ordered alphabetically. The lines correspond to the average scientific production of the countries, showing different levels of production that is not captured by classical regression methods (unobserved heterogeneity). It can also be seen that scientific production has changed over time in certain countries more than in others: Argentina has maintained its production over time, and Ecuador has changed more, showing scientific production with different variance between countries.

Figure 1. Scientific production in Latin America and the Caribbean, period 2000-2018.

Key: Argentina (ARG), Bolivia (BOL), Brazil (BRA), Chile (CHL), Colombia (COL), Costa Rica (CRI), Ecuador (ECU), El Salvador (SLV), Guatemala (GTM), Haiti (HTI), Honduras (HND), Mexico (MEX), Nicaragua (NIC), Panama (PAN), Paraguay (PRY), Peru (PER), Dominican Republic (DOM), and Uruguay (URY).

Figure 2 shows the relationship between the impact of economic growth and scientific production, in which we can see, through the solid line, the general association and by each country of Latin America and the Caribbean. There is evidence of a positive trend. At country level, less impact is observed in comparison with Latin America and the Caribbean.

Figure 2. Impact of gross domestic product on scientific output in Latin America and the Caribbean, period 2000-2018.

Pooled regression model (OLS). Key: Argentina (ARG), Bolivia (BOL), Brazil (BRA), Chile (CHL), Colombia (COL), Costa Rica (CRI), Ecuador (ECU), El Salvador (SLV), Guatemala (GTM), Haiti (HTI), Honduras (HND), Mexico (MEX), Nicaragua (NIC), Panama (PAN), Paraguay (PRY), Peru (PER), Dominican Republic (DOM), and Uruguay (URY).

The proposed static panel data models were the following: pooled regression, fixed effects and random effects. The estimated models, shown in Table 1, confirm the expected impact of economic growth on scientific production, which is estimated to be positive, $\widehat{\beta }$ = 2.91256 (p < 0.05) in the pooled regression model (OLS), $\widehat{\beta }$ = 1.77793 (p < 0.05) in the fixed effects model, and $\widehat{\beta }$ = 1.78803 (p < 0.05) in the random effects model; the coefficients of determination were 50.43%, 69.4%, and 69.4%, respectively. The first order correlations (rho) were estimated to be 0.971 and 0.967 in the fixed and random effects models, respectively. Apparently, the pooled regression model indicates a greater impact (see OLS in Figure 2), but, as we know, it does not consider differences between countries (unobserved heterogeneity).

The models were compared using various tests. In Table 1, heterogeneity between countries is evident (F = 550.05, p = 0.0000 < 0.05), unobserved by the pooled regression model. On the other hand, the Hausman test (Chi-square = 3.29, p = 0.0695 > 0.05) indicates no difference in the impacts estimated by the fixed effects model and the random effects model. Likewise, the Breusch and Pagan Lagrange multiplier test for random effects (Chi-square = 2674.65, p = 0.0000 < 0.05) indicates that the random effects model is better than the pooled regression model.

The assumptions of the fixed effects model were also evaluated. The Breusch-Pagan LM test for errors independence between countries results in its rejection (Chi-square = 790.614, p = 0.0000 < 0.05), which establish the dependence between them. First order autocorrelation was evaluated with the Wooldridge test (F = 16.683, p = 0.0008 < 0.05) and the Baltagi-Wu LBI test (rho = 0.634, F = 62.44, p = 0.0000 < 0.05), which show the presence of first order autocorrelation in both tests. The heteroscedasticity of the errors, using the modified Wald groupwise heteroscedasticity test for countries (Chi-square = 4798.87, p = 0.0000 < 0.05), indicates different variabilities between countries.

Once the heterogeneity of scientific production between countries was verified, the possible heterogeneity over time was also evaluated. Figure 3 shows a positive trend in scientific production in each country. Colombia, which in 2000 produced less than Chile and Argentina, in 2018 equaled Chile, and the production in both was close to Argentina’s production. Ecuador, whose production in 2000 was lower than Costa Rica’s, Uruguay and Peru, surpassed them as of 2016. In summary, average scientific production is expected to increase over time, showing temporal heterogeneity, giving rise to two-way models. The models estimated in Table 1 correspond to one-way models.

Figure 3. Scientific production in the period 2000-2018, in Latin America and the Caribbean.

Key: Argentina (ARG), Bolivia (BOL), Brazil (BRA), Chile (CHL), Colombia (COL), Costa Rica (CRI), Ecuador (ECU), El Salvador (SLV), Guatemala (GTM), Haiti (HTI), Honduras (HND), Mexico (MEX), Nicaragua (NIC), Panama (PAN), Paraguay (PRY), Peru (PER), Dominican Republic (DOM), and Uruguay (URY).

The two-way estimator models are shown in Table 2, including fixed-effects and random-effects panel data models. Compared to 2000, scientific production was differentiable in almost all years, with the exception of 2001 and 2002, when it was similar, both in the fixed effects model (p = 0.318 > 0.05 and p = 0.052 > 0.05, respectively) and in the random effects model (p = 0.349 > 0.05 and p = 0.068 > 0.05, respectively). Heterogeneity between countries is ratified (F = 850.61, p = 0.0000 < 0.05), and temporal heterogeneity is accepted (Chi-square = 169.59, p = 0.0000 < 0.05) through an additional test. The coefficients of determination improved, to 81.52% in the fixed effects model, and 81.45% in the random effects model.

The observed heterogeneity in the estimated two-way panel data models shows that the estimated impact of economic growth on scientific production, contrary to what was expected, is negative $\widehat{\mathit{\beta }}$ = -0.55548 (p = 0.002 < 0.05) in the fixed effects model and $\widehat{\mathit{\beta }}$ = -0.36630 (p = 0.041 < 0.05) in the random effects model.

The Hausman test establishes differences in the estimation of the parameters between both two-way models (Chi-square = 20.87, p = 0.0000 < 0.05), including differences in the impact of economic growth, indicating that the fixed effects model is adequate. Likewise, the Breusch-Pagan LM test for errors independence between countries showed their dependence (Chi-square = 643.664, p = 0.0000 < 0.05), and the modified Wald groupwise heteroscedasticity test (Chi-square = 2520.56, p = 0.0000 < 0.05) confirmed their presence. This situation led us, following Hoecche, to resort to the use of robust estimators by clusters to correct these drawbacks.

The two-way fixed effects panel data model with robust estimators corrects the standard errors of the estimators and modifies their significance level. In general, the model maintains the similarity of scientific production in 2001 and 2002 compared to 2000, and the differences in subsequent years.

As for the impact of economic growth on scientific production, estimated by the robust method, although it continues to be negative ($\widehat{\mathit{\beta }}$ = -0.55548, ${\mathit{s}}_{\widehat{\mathit{\beta }}}$ = 0.33876), it does not reach statistical significance (p = 0.119 > 0.05), which indicates the absence of such impact, and not the expected positive impact in Latin American and Caribbean countries included in the study.

Discussion

The aim of this study was to evaluate the impact of economic growth on scientific production in Latin American and Caribbean countries in order to collect important basic data to respond to the problems of low scientific production due to economic and structural causes faced by the region. This is important because one of the main objectives of the countries’ spending on research is to achieve higher-level scientific results that can improve the population’s standard of living.²⁸

One of the main findings was the absence of impact of economic growth on scientific production by the robust method, since this result differs from that reported by many studies that found a relationship between both variables.^29–33 However, it is likely that this difference is due, in the first place, to the characteristics of the study itself and to the fact that the evidence reported on the relationship between GDP and scientific production are, for the most part, specialized studies that include publications worldwide and do not cover scientific production in general.

For example, Jaca et al.³³ published a global bibliometric analysis of publications on vaccine refusal in the last 45 years, finding a relationship between scientific productivity and GDP. In addition, Latin American and Caribbean countries had the lowest production rates compared to the United States and European countries, which has also been reported by Ibañez-Marti.³⁴ Another example is reported by Senel in 2020,³⁵ who found an association between GDP and scientific productivity in the countries, in addition to a low contribution by Latin American and Caribbean countries in the area of immunology. In contrast, Ronda-Pupo reported a growth in global scientific production in the Latin American and Caribbean region³⁶ although, when productivity is analyzed by specialties or areas of knowledge and compared with the rest of the world, this region is below the average.³⁷

The impact of economic growth on scientific production in Latin America and the Caribbean for the period 2010-2018 did not differ broadly among countries. Economic growth was maintained in several countries; however, it mainly decreased in Brazil, Chile, Ecuador, Panama and Peru, and it decreased from 2012-2013 in Colombia and Venezuela. Latin America and the Caribbean continue to be a region with average or lower-than-average performance for most knowledge indicators and most growth components.³⁸ This may be due to its primarily product-based economy that is focused on the export of materials and unprocessed goods and has little added value from knowledge and technology, which creates a development gap in advanced technology that affects its economy. No less important is the conduct of research that does not respond to the priorities of policy-makers and that is not aligned with the needs of those responsible in the real world.³⁹

In terms of scientific production, Brazil and Mexico were the frontrunners, which coincides with what has been reported by other authors, such as Tibaná G.,⁴⁰ Ronda-Pupo³⁶ and Ibañez-Marti.³⁴ This leadership on the part of Brazil is probably due to the fact that, according to Tibaná, it is the only country in the region with an investment of more than 1% of GDP in scientific research. Moreover, with the exception of Brazil, there are few countries in Latin America that promote research and development activities with an intensity comparable to that recorded in developed countries.⁴¹

Besides being the country with the highest growth rate, this investment in research allows Brazil to have more than 400 journals in Scopus and to be ranked 15th in the world. It is worth mentioning that the areas with the highest scientific production correspond to ecology, technology and health.⁴² However, Ozsoy and Demir⁴³ reported in 2017 that Brazil is the country with the highest scientific production on bariatric surgery worldwide, leaving behind countries such as the United States or China, providing strong evidence of inequality in science in the region.

This could be indicative enough to conclude that science in the region is marked by a strong inequality, led by few countries, characterized by low regional integration²⁰ and with a high intercontinental participation led by Brazil.⁴⁴ In the case of Mexico, 68.13% of the articles that received funds from CONACYT were published in restricted-access journals. This means that a large part of the Mexican population does not have access to the results of research financed with state resources. According to economic theory, this restricted circulation of knowledge can undermine the advancement of basic science and innovation.⁴⁵ On the other hand, scientific production in Brazil remained the same, despite the fact that in recent years, Brazilian scientists have faced a drastic reduction in financial support for research and graduate programs.¹⁰ According to Jarrín-V et al.,²⁸ the efficiency with which a country assimilates investment in research and development depends on (and is limited by) its installed capacities (scientific infrastructure, human resources, programs and laws, etc.). Argentina, Colombia and Chile were the countries with the highest scientific production in the 2010-2018 period. However, Colombia, Costa Rica, Chile, Ecuador, Guatemala, Honduras, Paraguay and Peru also showed consistent growth, though to a lesser degree than the leading countries. Although Latin America has increased its number of scientists and research institutions in recent years, the gap between developed countries and Latin American countries is alarming.³⁷ The primary importance of science and technology for the development of a nation remains unrecognized. The main factors that contribute to low scientific productivity are limited access to grant opportunities, inadequate budgets, deficient levels of infrastructure and laboratory equipment, the high cost and limited supply of reagents and the inadequate salaries and personal insecurity of scientists. Political and economic instability in several Latin American countries has translated into a lack of the types of long-term goals that are essential for the development of science. In Latin America, science is not an engine of the economy.⁴⁶

The results in this study of the panel data regression were used to classify countries according to their assimilation of investment in research over time.⁴⁵ The role of the university in training professionals and generating knowledge through the development of research is key to a country’s economic growth. Therefore, at the university level, there must be an appropriate economic and institutional approach, adequate information infrastructure, a solid base of human capital and an efficient national information system.^47,48

Our study proposes a useful model panel data models that consider the differences in the impact of economic growth on scientific production in countries, fixed or random. This model makes it possible, with large samples and few assumptions, to estimate functional relationships between two variables that provide evidence of the importance of science and technology for academic, economic and social development.^49–52

Although the purpose of this research was to show a broad panorama of the countries of Latin America and the Caribbean, it is important to note that each nation has intrinsic characteristics that can affect its economic growth and its scientific production. However, all of them require the implementation of national policies that converge into a cooperative process that transforms knowledge into wealth and makes these countries more competitive against developed economies in terms of private sector participation in research and development activities. This requires policies that encourage private investment in an environment that is more favorable to new long-term investments. As most of the investment in research and development at present comes from the public sector, it is strategic to convert private resources into knowledge in the effort to consolidate innovation potential.

The present study has some limitations: (1) only countries with complete information in the World Bank's open database were included, so many countries were omitted, which can generate important losses of information; (2) measuring the scientific production of a country can be complicated since it can be understood differently according to personal perception. In addition, the impact of such an indicator has not been taken into account, such as the H index or type of journals, which could lead to different conclusions, since although there may be greater scientific production in a given time interval, this does not necessarily mean that there is greater impact of such publications. However, this is one of the first studies that seeks to relate economic growth and scientific production, and therefore provides important information that will serve as a basis for subsequent studies.

Conclusion

The present study is relevant because it is one of the first to study the impact of gross domestic product on scientific production in Latin American and Caribbean countries from a longitudinal perspective that also allows evaluating the dynamics of both variables. It was found that Brazil and Mexico lead the scientific productivity indexes in the region, while countries such as Peru, Chile and Uruguay have been increasing their scientific production but remain below the average in comparison with the leaders in the region and the world. However, it is necessary to carry out more studies on the subject since scientific production can be studied from different approaches including indicators such as the impact of scientific publications, the type of journal where the countries of the region publish the most and the level of international and intercontinental contribution in these publications. Therefore, a better understanding of the subject will allow better decisions to be made for a better management of national resources directed to research and development.