The Effect of Technological Innovation on Economic Growth: Evidence from ECOWAS Countries

Abstract

This study examines the impact of technological innovation on economic growth in the Economic Community of West African States (ECOWAS) from 2008 to 2020, which are lacking behind in terms of their innovation activities. Technological Innovation has a crucial impact on improving the productivity of human and physical capital which will translate to higher economic growth. Given the importance of technological innovation to economic growth, this study empirically investigates the effect of technological innovation on economic growth in these countries and examines how the improvement in human capital, foreign direct investment, institutions, physical capital and annual population growth can stimulate economic growth. The study employed a panel model with a fixed effect, two-ways and time random effect estimation method which helps to observe the heterogeneities in these countries. The study found that technological innovation has a negative impact on economic growth in these countries which is due to its poor institutions and the inability of their governments to formulate and implement policies that will promote human capital development that will produce meaningful technological innovation and/or effectively utilize existing ones.