The effect of technological innovation on economic growth: Empirical evidence from Kenya
Date
2021
Authors
Mohammed, Leila Haroon
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Kenya's recent classification as a Lower- middle-income country (LMIC) is proof that
the economy of Kenya is growing as per the Vis on 2030 Plan set in 2008. As
technological innovation development is a known factor for increasing the growth of a
nation's economy, Kenya's objective to transition into a knowledge-based economy
requires a proper understanding of the relationship between technological innovation,
that produces technological knowledge, and economic growth. This study puts
technological innovation into perspective and aims to empirically examine its
relationship to economic growth. It employs the use of Patent registered, Number of
trademarks registered in Kenya, and Scientific and Teclmical Journal articles in Kenya
as measures of technological innovation as well as Labour productivity Growth rate as a
proxy for economic growth. It establishes whether there exists a long-run relationship
between technological innovation and economic growth from 1981 to 2018 with data
sourced from The World Bank database. This study also seeks to examine whether there
exists bidirectional causality between technological innovation and economic growth.
The Autoregressive distributed Lag model and pairwise Granger causality test technique
are used for estimation. There is a short run relationship between total number of patent
applications and Labour productivity growth rate although the impact is quite small.
There is no presence of a significant long run relationship between technological
innovation and economic growth. The study also concludes that, there exists no
bidirectional granger causality between technological innovation and economic growth.
Description
Submitted in partial fulfillment of the requirements for the Degree of Bachelor of Business Science in Financial Economics at Strathmore University