The relationship between innovation and economic growth: the case of OECD countries

Innovation is accepted as the driving force of modern economies and plays a fundamental role in ensuring sustainable economic growth. With the acceleration of the globalization process and the penetration of technological advances into every aspect of society, the effects of innovation on economic growth have become more evident than ever before. Innovation is not limited to developing new products and services; it is considered a strategic tool that triggers radical transformations in many areas, such as business processes, production methods, distribution channels, and organizational structures. This transformation increases countries' productivity, supports economic growth, and provides a competitive advantage in global markets. The aim of the study is to examine the relationship between innovation and economic growth, specifically for the OECD countries for the 2011-2021 period, using the panel VAR analysis method. Real Gross Domestic Product per capita was used as the economic growth indicator, and the Global Innovation Index sub-components were used as the innovation indicator in the study, unlike the relevant literature. According to the findings obtained from the study, while institutions, infrastructure, and commercial development are the causes of growth in OECD countries, real GDP per capita is the cause of all innovation input sub-components.