Patents, foreign direct investment and economic growth in Australia, 1860–2010

Grant Fleming, Zhangxin Liu, David Merrett, Simon Ville

Research output: Contribution to journalArticlepeer-review


We examine the long run relationship between innovation and economic development in Australia, using 150 years of data on patenting activity, and aggregate and sectoral economic indicators. Our initial results point to several important causal relationships, particularly the effects of patents on real GDP and of private capital formation on patents. We delve deeper at the sector level and find important causal relationships of patents with real foreign direct investment (FDI) since World War II. Australia's dependence on FDI for private capital formation served as an important stimulus for knowledge creation in key sectors including manufacturing, agriculture and mining.

Original languageEnglish
Pages (from-to)382-410
Number of pages29
JournalAsia-Pacific Economic History Review
Issue number3
Early online date1 Oct 2023
Publication statusPublished - Nov 2023

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