A Comparative Analysis of the Asymmetric Impact of Innovation and Economic Growth in Vietnam: A Linear and Nonlinear ARDL Approach

Abstract

This study analyzes the impact of the Global Innovation Index (GII) and the Consumer Price Index (CPI) on Vietnam's economic growth (GDP) using both ARDL and NARDL models. The ARDL model results indicate that innovation has a positive long-term effect on GDP growth. The NARDL model reveals an asymmetric impact of innovation: increases in the GII promote economic growth, while decreases have an insignificant effect. The error correction term (ECT) is negative and statistically significant, confirming a long-run equilibrium relationship with an adjustment speed ranging from 24.83% to 28.85% per year. By simultaneously analyzing the effects of GII and CPI within a dynamic modeling framework and uncovering the asymmetric impact of innovation, this study addresses a gap in previous research. The empirical findings provide important policy implications for promoting innovation, managing CPI effectively, and fostering sustainable economic growth in Vietnam.