DOI: 10.36347/sjebm.2015.v02i10.009

Pages: 1032-1037

The study aims at determining the impact of the technological capability on the economic growth of Kingdom of Bahrain during the period (2005-2014). The study methodology is based on the econometric analytical approach to estimate the parameters’ values and the trends of the economic relationship between the study variables by employing the cointegration and Granger causality techniques. The study found that there is a positive long run relationship between the technological capability and economic growth. Granger causality test reveals that the technological capability Granger causes the economic growth in Bahrain. This means the technological capability could accelerate the economic growth in the long run. The study result is consistent with the new growth theory and various empirical studies in different countries. The study recommends that government and policy makers in Bahrain should pay careful attention to all of the factors that provide incentives for technological creation such as R&D, the education system, entrepreneurship and the tolerance for diversity, macroeconomic expectations and openness to trade.