Innovation as Determinants of Economic Growth in U.S. Counties

Abstract

Although innovation has long been considered a key driver of economic growth, no commonly accepted standard exists by which to measure innovative activities. Therefore, this article adopted a comprehensive variable, Innovation Index 2.0, which includes most previously used measurements of innovative activities in the literature. By using this index and its sub-indexes, we are able to thoroughly examine how they are connected to total personal income and population growth as proxies of economic growth. Another contribution of this article is that it focuses on smaller economic entities, U.S. counties, which have not been popularly studied in the literature. The regression results show that innovation as well as most of its related measures contribute to U.S. counties’ income and population growth rates