“…Distances from technological frontier (Colino, Benito-Osorio, & Rueda-Armengot, 2014;)our proxy is the TFP level at current PPPs (USA ¼ 1); Human capital (Tientao, Legros, & Pichery, 2016;Tvaronavi cien_ e, Tarkhanova, & Durglishvili, 2018;Vandenbussche, Aghion, & Meghir, 2006)in our research expressed as mean years of schooling; Institutions (Balcerzak & Pietrzak, 2016;Coe et al, 2009; Janto n-Drozdowska & Majewska, 2015)in our study, the institutional environment is measured by selected governance indices of the World Bank: government effectiveness and political stability; Trade openness (Danquah et al, 2014;Filippetti et al, 2017;Fracasso et al, 2015) measured with the use of export of goods and services as percentage of GDP, import of goods and services as percentage of GDP; Knowledge stock (Coe & Helpman, 1995;Fracasso & Vittucci Marzetti, 2015;Madsen, 2008;Tientao et al, 2016) measured with the use of patent applications; Knowledge investmentsmeasured with the research and development expenditures as percentage of GDP; Capital stockquantified directly as a capital stock at current PPPs.…”