Innovation and Economic Growth: An Empirical Analysis for CEE Countries

The innovation, R&D expenditures and the investments in technology are premises for ensuring competitiveness and progress, and through them a sustainable economic growth. A sustained level of education of the workforce, increasing investments in research area, the creation of the new products and the facile access of investors to stock markets, firstly, will ensure the development of the private and public sectors, and secondly, will improve the living conditions of the population. The purpose of this paper is to analyze if the long term economic growth is influenced by the innovation potential of an economy. Our analysis was performed by using multiple regression models estimated for the following CEE countries, namely Poland, Czech Republic and Hungary. In order to quantify the innovation we have used various variables, such as number of patents, number of trademarks, R&D expenditures. The results provide evidence of a positive relationship between economic growth and innovation.