The Impacts of Technological Innovation on Economic Growth in the United State

Tang, Je Cong (2023) The Impacts of Technological Innovation on Economic Growth in the United State. Final Year Project (Bachelor), Tunku Abdul Rahman University of Management and Technology.

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Abstract

Technological innovation plays a vital role in driving economic growth, and it is essential for policymakers and stakeholders to understand its impact in order to develop effective policies and strategies. The United States is one of the leading countries in terms of technological innovation, and studying the impacts of technological innovation on the country's economy can provide valuable insights for other countries. The secondary data are used, and the estimation covers the period from 1981 to 2020, with a total of 40 years. The dependent variable is real gross domestic product while independent variables are annual number of patents applications, annual number of trademarks applications, as well as the research and development expenditures. Tests are conducted using EViews 11 software. After confirming that the data exhibited no issues with stationarity through ADF and KPSS tests, the analysis proceeded with the Johansen Cointegration test, VECM test, and Granger causality test. The results suggested that number of patent applications, and number of trademark application have a long run impact on economic growth in the United State. On the other hand, research and development expenditure is insignificant to examine economic growth. To conclude, the findings of this study have illuminated the number of patent applications as the most influential examinations of economic growth in the United State, with the largest coefficient within the model. Hence, this study provided several suggestions for future research and policy recommendations to improve sustainable innovations and sustainable growth.