There are a number of empirical studies regarding the effects of KE dimensions on economic expansion [61]. For example, Hadad [28] proved that KE prompts economies to have vibrant and flexible schemes depending on state-of-the-art production elements, influences e-commerce, and other technological advancements while increasing economic benefit. According to Barkhordari, Fattahi, and Azimi [12], new knowledge creation and dissemination always lead to prompt a dynamic competition. In a recent study, Asongu et al. [11] discussed business dynamics, KE, and economic performance of 53 African countries from 1996 to 2010. Their main findings indicated that the dynamics of starting and doing business and changes in KE are strongly correlated to each other. Furthermore, a weak correlation is observed between KE and the economic performance of the underlying countries.
The knowledge that comprises reliability, specialization, and contestability features are considered to be powerful [70]. Harris and Ormond [29] concluded that relevant policymakers must focus on understanding and making adequate knowledge frameworks rather than pushing education through generic terms. In the context of Europe, Raspe and Van Oort [53] analyzed the contribution of knowledge toward economic growth. They used three main components of KE: knowledge workers, innovation, and R&D along with several other variables. They revealed that innovation and knowledge workers were more related to economic growth. According to authors, policymakers must preferably consider all three components while devising any regulation.
Despite an extensive literature showing the significant impact of KE on economic growth, Liargovas and Repousis [40] found some interesting results in Greece from 2007 to 2013. They used knowledge capital, business capital, and the stock of physical and labor capital in 51 Greek regions. The results demonstrated that in comparison with knowledge capital, business capital has a more profound impact on economic growth. They recommended that policymakers and regulators must also consider entrepreneurship as a tool for spreading knowledge. In another study, Bogoviz et al. [13] investigated the role of human in the economic system under the conditions of KE in Russia. They used correlation analysis to find the dependence of KE on different types of resources, i.e., technological, human, material, and investments for the period 2010–2016. They concluded that KE provides more opportunities in the source of creation, implementation, and dissemination of innovational goods. This leads humans to become active innovational entrepreneurs.
In the African countries’ context, Amavilah et al. [3] investigated how globalization affects peace and stability through the channel of governance and KE. The authors used the instrumental variable panel fixed effects estimation econometric approach for a sample of 53 African countries for the period 1996–2010. They found that sustainability in KE can only be achieved if African countries pursue such globalization policies that result in peace and stability. Similarly, Muzaka [47] conducted a study on competitive KE in two emerging states India and Brazil for the 1990s. The findings revealed that strong nationalist sentiments are the pillars on which India and Brazil built this new orientation toward becoming successful KBE. However, these types of sentiments are not present in advanced economies. Likewise, Dima et al. [21] analyzed the relationship between KE and global competitiveness in the European Union (EU). They used various indicators of KE such as R&D expenditure, lifelong learning, GDP per capita, percentage of the population with tertiary education, and debt to equity. They found that innovation and education play a crucial role as predictors of economic growth. However, they concluded that focus on R&D activities and lifelong learning possibilities could significantly contribute to competitiveness in EU member states.
Similarly, the role of new knowledge capital in firm production and industrial growth is analyzed by Woods et al. [69]. He used two productions and one learning model. He concluded that a firm might experience a decrease in knowledge capital under diminishing returns. He found that when a firm updates its knowledge capital, it not only increases its productivity but it also has a spillover effect on the whole industry. Nurunnabi [50] examined how Saudi Arabia is swiftly transforming itself into a KE. The findings demonstrated that despite the rapid transformation of Saudi Arabia into a KBE from the last few decades, some steps are needed to be implemented to avail full-scale advantages of KE. He further suggested that Saudi Arabia must increase its GDP allocation toward further R&D process. Also, reducing unemployment in female graduate students and rising human capital are some key issues that need attention from the relevant authorities.
Several studies proved that education helps to improve the KE level in any economy. For example, Evoh et al. [22] analyzed how different aspects of KE, especially higher education institutions, and the application of ICT innovations influence capacity development in Africa. They used different learning institutions in Kenya and Uganda as case studies. The results revealed that knowledge production for the advancement of African economies is not fulfilled by the higher education system. They further suggested that higher education institutions must engage in design-driven innovation and employ public–private initiatives in universities and research institutions.
On the relevance of education in the context of the global economy, Bogoviz et al. [14] analyzed the regularities and tendencies of globalization of education required in KE in nine different economies. They used various qualitative and quantitative measures and found a significant association between multiple indicators of KE on the globalization of education. They discovered that globalization of education increased the creation of KE. The results revealed that from 2016 to 2018, the tendencies showed decreased foreign lectures and an increase in international students. Similarly, Hassan and Cooray [30] proved the vital role of education in economic growth. They examined the effects of school enrollment on economic development taking a variety of gender groups from the Asian perspective. They found that the results of education are considered positive for both males and females at all educational levels including primary, secondary, and tertiary ones.
Wantchekon et al. [67] found that the benefit of educating one generation can develop a better attitude toward education and learning in the coming generations. Even educated relatives can transfer their knowledge to extended family members. This transfer of knowledge was not seen in the uneducated family and friends. In terms of Asian countries, Hongyi and Huang [33] conducted a study on health, education, and economic growth in China. They used a panel data set of 28 provinces in China for the period 1978–2005. After employing panel regression two-stage least square regression analyses, they found that both education and health are positively associated with economic growth.
Similarly, Gyimah-Brempong et al. [27] analyzed the role of higher human education capital on the economic growth of African countries using a dynamic panel data estimator from 1960 to 2000. The findings revealed that the growth rate per capita income is significantly related to higher education human capital. Their results imply that both economic growth and education human capital rely on physical capital investments. In another study, Moodie and Wheelahan [46] criticized that generic education delivered is a product rather than a process by which knowledge can be derived. He further argued that the curriculum approach of teaching knowledge must be altered from generic to disciplinary methods. This would help intelligent knowledge users. He further argued that intelligent knowledge users could learn through history. They can easily relate past knowledge to solve problems of the present and future.
Innovation is considered to be one of the most important elements that contribute to KE and business performance. The expansion of the global economy rests upon the fundamental strands of open innovation. Thus, the creation, use, and management of knowledge drive both competitiveness and productivity [68]. In the innovation dimension, Agénor and Neanidis [1] found that an extra innovation routine enhances economic growth. It was studied in the role of R&D spending in the economic progress of 66 economies during the period 2000–2009. The results found that R&D spending positively affected the growth in upper-middle-income countries [34]. Castellacci and Natera [15] also proved positive relationship between strong innovation policies and economic development.
Gabriele et al. [25] analyzed the R&D collaborations in the regional context. The findings elaborated that knowledge represented by public research institutions is the primary source that firms use for collecting knowledge. Furthermore, they found that smart firms acquired knowledge from sources outside the region and did not primarily rely on local knowledge hubs. In another study, the relationship between transmission power and indicators of KE in six OECD countries (USA, Canada, France, Germany, Japan, and South Korea) is analyzed by Mêgnigbêto [44]. The results indicated that for 2001–2010 in South Korea and Japan, there is a strong positive correlation between gross domestic expenditure for R&D and transmission power.
Information, communication, and technology have been game-changer in KBE. Firms can achieve sustainable competitive advantage in high-tech industries. By keeping in mind this perspective, Martín-de Castro [42] explained one of the most complex business phenomena in the form of a firm’s technological advantage. He proved that a firm could never achieve higher strands of innovation in isolation. External relationships develop better and faster innovations. Das et al. [17] and Jorgenson and Givens [37] proved that ICT is positively related to economic development. They concluded that ICT investment had a positive and significant effect on the development of the global economy.
Barkhordari et al. [12] found that the MENA region is investing its revenue in construction schemes, ICT, and good health facilities to improve its economic condition. He further added that strong financial institutions would favor investing in new technology to enhance economic growth. In terms of Asian countries, Ahmed and Ridzuan [2] used the panel estimation approach to investigate the impact of ICT on East Asian economic growth from 1975 to 2006. They used ICT investments, capital, and labor as independent variables while the real gross domestic product (GDP) is used as a dependent variable of the study. The findings indicated that investments in ICT products are positively and significantly related to GDP. They recommended that East Asian countries must invest more in ICT products to achieve sustainable growth in the long-run period.
Datta and Agarwal [18] used data for 22 OECD countries and analyzed the long-run association between telecommunication infrastructure and economic growth. They revealed that both variables are positively and significantly related to each other. Similarly, Roller and Waverman [54] found that demand for telecoms is significantly and positively associated with GDP for 1970 to 1990 for a sample of 36 countries. In the case of Singapore, Poh, Ang, and Bai [51] analyzed the impact of ICT investments on productivity from 1977 to 1997 using Cobb–Douglas production. The main findings indicated that productivity maintained a positive and significant relationship with ICT investments. Similarly, Niininen [49] also concluded that ICT has a substantial impact on real growth output in Finland.
Shahbaz et al. [60] analyzed the relationship between ICT and electricity demand in the UAE by using co-integration for 1975–2011. They found that electricity consumption increased by the use of ICT. The causality analysis proved that electricity consumption does not Granger causes ICT, but the same is true for the opposite side. However, electricity prices Granger causes both economic growth and ICT. They suggested the use of smart ICT infrastructure and an increased focus on energy-efficient R&D policies help to achieve sustainable economic growth. In the same line, Sadorsky [57] analyzed the impact of ICT on electricity consumption. They used Internet connections, mobile phone users, and the number of personal computers as a proxy for ICT. The findings demonstrated a positive association between ICT and electricity consumption. Likewise, Ishida [35] found a long-run stable relationship between the demand for energy and production function from 1980 to 2010 in Japan. They used multivariate models related to demand for energy and production function. Moreover, comparative analysis between emerging and G7 countries on various aspects of KE and total factor productivity (TFP) is done by Shahabadi et al. [59]. They used panel data analysis for the period 1996–2013. The results indicated that the ratio of ICT capital stock to GDP and the ratio of foreign R&D capital stock to GDP have the greatest positive impact on TFP. The results largely imply that emerging economies adopt new production factors such as domestic R&D and innovation while leaving behind traditional production factors.
Political institutions make economic institutions. The strategies and policies made by the economic institutions result in economic growth. Hence, it concludes that political institutions provide the impetus for economic development [23]. Similarly, Asongu and Andrés [9] found that the absence of adequate credit facilities harms the growth of KEs in Africa and Middle East countries. In respect of the innovation aspect, they noted that the lack of technical and scientific publications is restricting these economies from obtaining the full benefits of KBEs. The finding further proved that the time required for full convergence from low to high level of KE is about 4 to 7 years.