Innovation and Growth: Evidence from Mexico and Brazil

Using Granger causality test, the study finds the presence of unidirectional and bidirectional causalities between innovation and per capita economic growth. These results vary depending upon the types of innovation indicators that we use in the empirical investigation process. Most importantly, the study finds that all these innovation indicators are considerably linked with per capita economic growth. Both countries should recognize the differences in innovation and per capita economic growth in order to create policies regarding development.