Financial Drivers of Innovation: An Analysis of Its Determinants in G10 Nations

Innovation plays a crucial role in the financial growth and development of the nation. This is because an increase in portfolio investment attracts foreign capital into the economy, which further adds to innovation due to increased capital. In addition, financial growth signifies a rise in the production of goods and services in an economy, which further stimulates the wages and profitability of businesses in the long run. Thus, this research incorporates a panel data analysis to explore the association between financial determinants and innovation index in G10 economies using the RE model, the FE model, and the Hausman test. The results of the research indicate that a rise in financial determinants adds to the innovation index in G10 economies