Industrial Performance and Economic Diversification: The Role of Innovation in Resource-Dependent Economies

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@article{1723259,
      author = {Mfon  Edet Okon, David Thompson Udoffia},
      title = {Industrial Performance and Economic Diversification: The Role of Innovation in Resource-Dependent Economies},
      journal = {Iconic Research And Engineering Journals},
      year = {2026},
      volume = {10},
      number = {3},
      pages = {3710-3727},
      issn = {2456-8880},
      url = {https://www.irejournals.com/formatedpaper/1723259.pdf},
      abstract = {This study examined the relationship between industrial performance, innovation and economic diversification in resource-dependent economies. Specifically, it assessed the effect of industrial performance on innovation and economic diversification and investigated the role of innovation in the industrial performance-diversification relationship. Panel data were analysed using fixed- and random-effects regression techniques, with the appropriate estimator selected using the Hausman test. The findings show that industrial performance has a negative and statistically significant effect on both innovation and economic diversification. However, innovation exerts a positive and significant effect on economic diversification, suggesting that technological adoption can support the expansion of economic activities beyond resource-based sectors. Control of corruption and political stability also demonstrate positive effects on diversification, while foreign direct investment records a negative effect. The findings suggest that industrial expansion in resource-dependent economies has not sufficiently generated technological upgrading or broad-based structural transformation. The study therefore recommends innovation-oriented industrial policies, stronger domestic value addition, improved institutional quality, and foreign investment strategies that promote technology transfer and linkages with non-resource sectors.},
      keywords = {Industrial Performance; Innovation; Economic Diversification; Resource-Dependent Economies; Technology Adoption},
      month = {September},
  }