Abstract: Both technological innovation and foreign direct investment have received widespread
attention in the literature on their role in promoting economic growth. Therefore, this study aims
to test the relationship between foreign direct investment, technological innovation, and economic
growth of the Egyptian economy during the period between 1990–2019 using the autoregressive
distributed lag model simultaneous integration test. Our findings show the ARDL (Autoregressive
Distributed Lag) model estimates a joint complementary relationship between the rate of growth of
per capita gross domestic product (GDP) in US dollars and the independent variables in the model in
the long and short term, which are statistically significant results. We found a positive significant
relationship between the variables of incoming foreign direct investment and the share of total capital
formation in economic growth. Therefore, in the long term, the rate of inflation and the innovation
index had a negative impact in the long term and the speed of adjustment towards equilibrium was
very large, as it was estimated at 1.5 years (1/0.651). Furthermore, the study also provides valuable
lessons and a strategic vision for the Egyptian government, which aspires to advance technology and
attract more foreign direct investment.
Keywords: ARDL model; economic growth; technological innovation; foreign direct investment; the
Egyptian economy