Ghana’s economic growth: Directing our focus on the contributing influences of innovation activities and trade

Abstract

AbstractInnovation and international trade are crucial determinants of economic growth. Research on economic growth has mainly focused on the possible link between innovation and economic growth as well as the link between international trade and economic growth. Yet, research on the nexus that exists among innovation, international trade, and economic growth has remained unexplored. Moreover, research on the individual contributing factor of innovation and international trade to economic growth in the same study has equally remained unexplored. Thus, to address these gaps, this study evaluated the connection among all three variables. It further examined the individual contributing factor of innovation and international trade to economic growth. Annual time‐series data of the Ghanaian economy over a period of 2000–2019 was employed in this study. The findings established that all three variables: innovation, international trade, and economic growth cointegrated. This implies that there was a long‐run equilibrium association between all three variables. The study further estimated long‐run cointegration parameters using the fully modified ordinary least squares and dynamic ordinary least squares. The results proved that there was evidence of a positive correlation between economic growth and innovation, while there was a negative correlation between economic growth and international trade.