Fiscal Policy as a Driver of Economic Complexity: Evidence from Selected OECD Countries

Aktuğ M., Polat S., Başoğlu A.

JOURNAL OF THE KNOWLEDGE ECONOMY, ss.1-30, 2025 (Scopus)

Özet

The global economy has undergone a transformative shift, increasingly characterized by knowledge-intensive industries and innovation-led growth. Traditional production factors, such as labor and capital, are now complemented or supplanted by knowledge as the primary driver of productivity and competitive advantage. This study explores the nuanced relationships between fiscal policies and economic complexity influenced by knowledge creation, diffusion, and application. By framing the research within the context of the knowledge economy, the study emphasizes the critical role of fiscal tools, particularly corporate income tax structures, in enabling sustainable and inclusive economic growth through economic complexity. For this purpose, second-generation panel data techniques that account for cross-sectional dependency and heterogeneity were employed. The findings highlight that well-designed fiscal policies, particularly reductions in corporate income tax for sectors with high value-added activities, serve as catalytic tools to create environments that foster innovation. These policies directly incentivize research and development (R&D) expenditures and indirectly encourage inter-sectoral knowledge spillovers. This dual effect strengthens the structural fabric of knowledge-based economies and supports economic complexity, which is a crucial factor in sustainable development and innovation. The study contributes on multiple levels by addressing systemic, organizational, and individual knowledge-driven dynamics. At the macroeconomic level, it analyzes the policy levers that enable national economies to enhance their competitiveness. At the organizational level, it identifies how firms can optimize resource allocation in response to fiscal incentives. At the micro level, the study implies how individual entrepreneurs and innovators can benefit from tax expenditures, thereby linking fiscal policies to the broader agenda of systemic transformation.