Proceedings of The 7th International Conference on Advanced Research in Business, Management and Economics
Year: 2023
DOI:
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The Relationship Between Innovation and Economic Growth (An Empirical Analysis for MENA Countries)
Dr. Mohamed Fargani
ABSTRACT:
The innovation, R&D expenditures and the investments in technology are an essential driver of economic progress that benefits consumers, businesses and other activities premises. Therefore, technological innovation is the main driver for the economic growth. For ensuring the progress of competitiveness and sustained level of education of the workforce, increasing investments in research area, the creation of the new products and the facile access of investors to stock markets, firstly, will ensure the development of the education in private and public sectors, and secondly, will improve the living conditions of the population. The aim of this paper is to employ the growth accounting exercise to identify factors that have determined the economic growth of selected MENA countries namely Algeria, Egypt, Iran, Morocco and Saudi Arabia by using exogenous and endogenous growth theory. Our analysis was performed by using unrestricted VAR model with variables that are stationary and whose lag numbers are selected by AIC and SBIC. Once the VAR model with optimal lags has been selected, we estimate the long-run coefficients. In order to quantify the innovation, we have used various variables, such as number of patents, education, labor force and fixed capital accumulation, R&D expenditures. The results provide evidence of a positive relationship between economic growth and innovation.
keywords: economic growth, innovation, education, research and development, MENA & South Asian countries