Economic Growth in Switzerland: The Roles of Exchange Rate, Inflation, Foreign Direct Investment, Trade Openness, Renewable Energy, and Open Innovation—Evidence from the ARDL Approach

This study investigates the dynamic relationship between gross domestic product (GDP), exchange rate (EXR), inflation (INF), foreign direct investment (FDI), trade openness (TO), renewable energy (RE), and open innovation (OI) in Switzerland using the Autoregressive Distributed Lag (ARDL) method. Using annual data from 1990 to 2024, the study identifies short- and long-term interactions among these variables, contributing to an understanding of how economic, environmental, and OI factors interconnect in a developed economy. The findings reveal that FDI and RE positively influence GDP, while INF and EXR fluctuations negatively affect it in the long run. TO and open OI significantly enhance economic growth (EG), showcasing Switzerland’s commitment to fostering sustainable development. These insights offer actionable policy implications, such as enhancing investment in RE and OI ecosystems, stabilizing macroeconomic variables, and promoting international trade collaborations. Understanding these economic interdependencies is crucial for policy formulation and economic stability. The ARDL method enables a robust examination of short- and long-run dynamics, providing new insights into Switzerland's economic structure. Our findings suggest that TO and FDI significantly contribute to GDP growth, while EXR fluctuations and INF present complex influences. Moreover, RE adoption and open OI demonstrate positive long-term effects on economic performance. Policy implications are discussed in light of these findings.