The impact of innovation on economic growth among G7 and BRICS countries: A GMM style panel vector autoregressive approach

The study aims to investigate the impact of innovation on economic growth among the G7 and BRICS countries. Our data was retrieved from the World Development Indicators database (World Bank 2019) from the period 2000-2017. Innovation is measured by R&D, patents, and trademarks. This research explored how GDP per capita reacts to a shock from R&D, patent, and trademark among G7 and BRICS countries. Stationarity tests are conducted through panel unit-roots tests. The authors employed a GMM style panel VAR estimator to investigate the phenomenon. Our results revealed that R&D, patent, and trademark as the determinants of innovation have a significant impact on GDP per capita also as a determinant of economic growth among G7 and BRICS countries. However, the impact is more among the G7 than the BRICS countries. The impulse response function of the panel VAR estimates shows that the impact of one standard deviation shock in R&D, patent, and trademark on GDP per capita varies from year one to year ten among these variables for both G7 and BRICS countries.