Indonesia Conference Directory

This study examines the effects of innovation on economic growth by using data of 58 developed and developing countries during 2006-2015 period. R&D expenditures, the number of patents and the number of registered trademarks of each country are used to capture the multiplicity of innovation activities. Using the two-step GMM approach, this study find that R&D expenditures positively correlated with economic growth, similarly with the number of patents and trademarks. It implies that innovation activities play an important role in ensuring the sustainable economic growth. Moreover, this study investigate that this relationship was stronger in high and upper-middle income countries than lower income countries. Besides that, government spending, foreign direct investment, trade openness and labor policies also contribute significantly to economic growth.