The impact of innovation on GDP growth in different countries

Abstract

This study empirically investigates the impact of technological innovation on GDP growth across countries and the combined effect of investment and innovation on economic growth. A multiple linear regression model is estimated with foreign direct investment, patent activity, regulatory quality, population growth and inflation as explanatory variables, and two hypotheses are tested. The results show that technological innovation has a positive and statistically significant effect on GDP growth (t = 3.848; p < 0.001), which confirms hypothesis H2a. In the joint model, the coefficients of investment (0.300) and innovation (0.250) are positive and significant at the 0.1% level, regulatory quality and population growth are also significant, while inflation is not; the model explains 57.8% of the variation in GDP growth (R² = 0.578), which confirms hypothesis H3. The findings are consistent with endogenous growth theory and with studies showing that innovation raises productivity through process, product and business model innovation. Policies that combine investment attraction with support for research and development are recommended to sustain economic growth.