Assessing the Spillovers Effect of Infrastructure and Innovation on Economic Growth

Abstract

Infrastructure and innovation have become a key elements of sustainable long-run economic growth and had been explained in endogenous growth theory. The analysis draws of infrastructure quality and innovation data for ten countries. The estimation data is from 2008 to 2020. The empirical analysis involved the estimation of the cointegration test, dynamic OLS, and long-run estimation coefficient. The finding shows that the spillover effects of infrastructure indicate the highest effect on long-run economic growth, but the effect of innovation could not be denied due to a positive and significant coefficient. Thus, government and policymakers should play a significant role in developing infrastructure to sustain economic growth.