The Effect of Innovation on Economic Growth:(A Case Study in Selected Islamic Countries)

This paper aims to delineate the dynamics of innovation and economic growth in 20 countries in OIC (Organization of Islamic Cooperation) based on data entailing the period of 1995-2009, using group pooled technique. This theoretical model is based on Romer's studies (1990).   In doing so, the researchers have employed the number of Patent index to measure the impact of innovation on economic growth. As such, the paper has investigated the casual relationship between economic growth and degree of economic openness, foreign direct investment, practitioners’ per capita income, human development, and labor separately. The result indicates that innovation has rendered a positive impact on economic growth.  Moreover, it has been found that no casual relationship has not between labor and economic growth, and the degree of economic openness, foreign direct investment, practitioners per capita income have rendered a positive impact on economic growth.  Furthermore, human development has rendered a negative impact on economic growth.