Innovation and Economic Growth in Jordan

Abstract

In light of the pressing need to examine Jordan’s progress in modernizing its economic structure and advancing along the path of technological development, this study investigates the impact of the Innovation Index on economic growth rates. The research draws upon theoretical literature and growth theories that emphasize the role of technological advancement in stimulating economic performance. Methodologically, the study employs both a descriptive-analytical approach and an econometric framework by constructing a tailored model to achieve its objectives. Several statistical tests were utilized, including the Dickey-Fuller and Phillips-Perron unit root tests for stationarity, the Johansen co-integration test for examining long-term relationships, and the Ordinary Least Squares (OLS) method for parameter estimation. The findings indicate that growth in capital accumulation, labor force expansion, and innovation all exert a positive and statistically significant impact on Jordan’s economic growth. Conversely, the results reveal a negative relationship between trade openness growth and economic growth in Jordan. The study recommends that policymakers intensify efforts to foster innovation and increase investment in its key inputs, aiming to bridge the gap between innovation inputs and outputs, given its critical role in enhancing economic growth in Jordan.