The Impact of Innovation and Economic Growth in Developed Countries

Sayef Bakari

Economic Research Guardian, 2024, vol. 14, issue 1, 32-54

Abstract: This research examines the influence of innovation on the economic growth of 24 developed countries over the period from 1990 to 2021. Employing the static gravity model alongside the generalized method of moments, the empirical findings demonstrate a notable and positive impact of innovation on economic growth. Furthermore, employing cointegration analysis and the Panel Vector Error Correction model, the research confirms that innovation exerts a favorable and substantial influence on both short-term and long-term economic growth. Based on these findings, it is recommended to actively promote and support innovation in developed countries. This could involve implementing policies that foster research and development, ease access to financial resources for innovative firms, and establish a regulatory framework conducive to fostering innovation.

Keywords: Innovation; Economic growth; Static Gravity Model; GMM; Panel VECM; Developed countries (search for similar items in EconPapers)
JEL-codes: O31 O32 O47 O50 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:wei:journl:v:14:y:2024:i:1:p:32-54

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