Impact of Innovation on Economic Growth of G8 Countries- Analysis Over 1996-2020
DOI:
https://doi.org/10.26668/businessreview/2023.v8i5.1403Keywords:
Gross Domestic Product, Publicly Funded Research and Development Expenditures, Technological Human Capital, Scientific and Technological Journal Articles, Patent Applications, Patent GrantsAbstract
Purpose: The study aimed to analyze the relationship between innovation and economic growth in the G8 countries over the period 1996-2020.
Theoretical framework: The theoretical framework id built upon the neo-classical growth theory, endogenous growth theory, and the innovation systems approach.
Design/methodology/approach: The research used the Vector Auto Regression (VAR) model and penal regression, and found evidence of a positive and significant relationship between innovation and economic growth through the results of the Johansen co-integration test. The Granger causality Wald test also indicated that lgdp (GDP) Granger causes irrd (research and development), ipan (patent application), lpar (participation rate), lhte (high-tech exports), lede (educational expenditure), and istj (scientists and engineers), with strong evidence against the null hypothesis.
Results: The test results presented in the table provide information on the rank of the co-integrating relationships. The maximum and minimum values of the trace statistics and eigenvalues are reported at each rank, along with the critical values at 5% and 1% significance levels. Granger causes the other time series results suggests that lgdp Granger causes irrd (p-value = 0.034), ipan (p-value = 0.005), lpar (p-value = 0.001), lhte (p-value = 0.029), lede (p-value = 0.000), and istj (p-value = 0.000). The p-value for the overall test (lgdp vs. all) is 0.000, indicating that lgdp Granger causes all the other time series.
Findings: The fixed effects regression model showed a significant relationship with an F-statistic of 2.54 and a corresponding p-value of 0.0218. The study provided policy recommendations to support innovation-led economic growth in the G8 countries.
Downloads
References
Acharya, V. V. (2022). Zombie lending:Theoretical, international, and historical perspectives. . Annual Review of Financial Economics,, 14, 21-38.
Aghion, P. H.-C.-P. (1998). Endogenous growth theory. MIT press. MIT press: Endogenous growth theory. MIT press.
Baumol, W. J. (2002). The free-market innovation machine: Analyzing the growth miracle of capitalism. . Princeton University Press.: Princeton University Press.
Gereffi, G. (2019). Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in. Journal of International Business Policy,. International Business Policy,, 195-210.
Grossman, G. M. (1991). Quality ladders in the theory of growth. . The review of economic studies,, 58(1), 43-61.
Irene, B. M. (2016). Indicators and metrics for social business: a review of current approaches. . Journal of Social Entrepreneurship, , 7(1), 1-24.
Jaffe, A. B. (2020). Technological opportunity and spillovers of R&D: evidence from firms' patents, profits and market value. xyz, 34.
Jones, C. I. (2003). R&D-Based Models of Economic Growth. I. NTERNATIONAL LIBRARY OF CRITICAL WRITINGS IN ECONOMICS, , 165, 166-191.
Lucas Jr, R. E. (1988). On the mechanics of economic development. . Journal of monetary economics, , 22(1), 3-42.
Nelson, R. &. (1982). An Evolutionary Theory of Economic Change,. Harvard Unv. Press, USA, 14.
Park, M. S. (2017). . Eco-innovation indices as tools for measuring eco-innovation. Sustainability, . eco-innovation. Sustainability, , 9(12), 2206.
Ramadani, V. G. (2013). Innovation and economic development: The case of FYR of Macedonia. . Journal of Balkan and Near Eastern Studies,, 15(3), 324-345.
Romer, P. M. (1986). Increasing returns and long-run growth. . Journal of political economy, , 94(5), 1002-1037.
Romer, P. M. (1990). Endogenous technological change. . Journal of political Economy, , 98(5, Part 2), S71-S102.
Sellar, S. &. (2013). The OECD and global governance in education. . Journal of education policy, , 28(5), 710-725.
Solow, R. M. (1956). A contribution to the theory of economic growth. The quarterly journal of economics, , 70(1), 65-94.
Trimborn, T. K. (2008). Multidimensional transitional dynamics: a simple numerical procedure. Macroeconomic Dynamics, , 12(3), 301-319.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 Grii Nihal, Cherkaoui Mounia, Mujahid Hussain, Saqlain Humayun, Najma Perveen, Nawal Rehman Yousaf, Saima Akhtar

This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Authors who publish in this journal agree to the following terms: the author(s) authorize(s) the publication of the text in the journal;
The author(s) ensure(s) that the contribution is original and unpublished and that it is not in the process of evaluation by another journal;
The journal is not responsible for the views, ideas and concepts presented in articles, and these are the sole responsibility of the author(s);
The publishers reserve the right to make textual adjustments and adapt texts to meet with publication standards.
Authors retain copyright and grant the journal the right to first publication, with the work simultaneously licensed under the Creative Commons Atribuição NãoComercial 4.0 (http://creativecommons.org/licenses/by-nc/4.0/), which allows the work to be shared with recognized authorship and initial publication in this journal.
Authors are allowed to assume additional contracts separately, for non-exclusive distribution of the version of the work published in this journal (e.g. publish in institutional repository or as a book chapter), with recognition of authorship and initial publication in this journal.
Authors are allowed and are encouraged to publish and distribute their work online (e.g. in institutional repositories or on a personal web page) at any point before or during the editorial process, as this can generate positive effects, as well as increase the impact and citations of the published work (see the effect of Free Access) at http://opcit.eprints.org/oacitation-biblio.html