The Semiconductor Industry and High-Quality Economic Development: An International Perspective

Abstract

Purpose - This paper is an empirical investigation of the mediation effect of innovation activity in industry transformation considering the relationship between the semiconductor industry and high-quality economic development. The research questions are whether the semiconductor industry drives high-quality economic development and if so, what is the semiconductor industry's role in high-quality development? We found that the semiconductor industry has clearly improved the quality of economic development, and its comparative advantage has significantly increased per capita national incomes. Furthermore, innovation activity proved to be an intermediary factor for the semiconductor industry to promote high-quality economic development. The world economy should aim to reasonably develop the international semiconductor industry and cultivate innovation markets. Design/methodology - Our empirical model considers the relationship between the semiconductor industry, innovation activity, and high-quality economic development. We constructed an analysis framework based on data from 199 World Bank economies between 1995 and 2019, and we used a mediation effect method to calculate the total effect of the semiconductor industry on promoting high-quality economic development, the indirect effect of the semiconductor industry on promoting innovation activity, and the mediation effect of these innovation activities on the promotion of high-quality economic development. Findings - The results show that the semiconductor industry has significantly promoted high-quality economic development. This is true even after the robustness test of grouping and alternative variables was applied. An analysis of the mechanism shows that promoting patents, scientific research, efficient government, and urban management innovation are important mechanisms for the semiconductor industry to release high-quality development dividends. Originality/value - Although it has been shown that specific industries like semiconductors can affect high-quality economic development through industrial upgrading, few researchers have attempted to empirically test the impact of the semiconductor industry on high-quality economic development. In this paper, we use a mediation effect model, alternative variables and a grouping test to find the internal mechanisms of the comparative advantage of the semiconductor industry in high-quality economic development from the perspective of innovation activity.