A Survey on the Possible Causality Relationship and the Impacts of Innovation on Economic Growth in Selected MENA Countries

اقتصاد پولی مالی

Article 2, Volume 24, Issue 14, October 2017, Pages 22-39   

Document Type: پژوهشی

DOI: 10.22067/pm.v24i13.43180

Authors

Nava Ramezanian Bajgiran^* ; Mostafa Salimifar; Ali Akbar Naji Meydani; Mohammad Salimifar

Ferdowsi University of Mashhad

Abstract

According to endogenous growth theories, knowledge, innovation and technology are the most important factors affecting economic growth. There is also the view that economic growth can in turn expand the innovation and inventions by facilitating access to the financial resources for the entrepreneurs. In other words, there may be a circular flow between innovation and economic growth. Despite the importance of innovation in the economy, little has been done about this subject, especially in developing countries. Hence, this study was designed to investigate the causal relationship and correlation between innovation and economic growth in selected MENA countries during 1995 to 2011, using a vector error correction model and panel data econometrics. The findings suggest that there is a one-way causal relationship from innovation to economic growth in both the short and long run; however, there is no correlation between innovation and high-tech exports with economic growth. Also, foreign direct investment, gross capital formation and GDP growth rate of the previous periods, unlike the government expenditure variable, have significant positive relationship with economic growth

Keywords

Innovation; Economic Growth; MENA Countries; causality; Panel Data