Human Capital, Innovation, and Economic Growth in Peru: An Extended MRW-Ardl Analysis (1990–2020)

This paper examines the determinants of economic growth in Peru over the post-liberalisationperiod 1990–2020 within an extended Mankiw–Romer–Weil (MRW) neoclassical frameworkaugmented with foreign direct investment (FDI), trade openness, innovation proxied byresident patent applications, and disaggregated public expenditure on education and health percapita. The optimal model, ARDL (1,1,0,1,1,1,1,0), is selected from 64 candidate specificationsvia the Akaike Information Criterion, achieving an R² of 0.952 and an F-statistic of 12.56.Results reveal a negative first-lag auto-effect on GDP per capita (β = −0.443), indicative ofstructural growth inertia. Trade openness emerges as the single most robust and statisticallysignificant growth driver (β = 0.318, p < 0.05), while public expenditure on education per capitacontributes positively and significantly (β = 0.263, p < 0.05). FDI exerts a positive butmarginally significant contemporaneous effect (β = 0.209, p = 0.062). Innovation proxied byresident patent applications exhibits a consistently negative and insignificant association withoutput growth (β = −0.032), revealing a structural disconnect between formal innovationactivity and productive transformation. Bounds cointegration is confirmed (F-statistic = 5.623),and CUSUM/CUSUM-squared tests confirm full parametric stability across the estimationwindow. These findings carry direct comparative implications for resource-dependentdeveloping economies in Asia, demonstrating that trade-led openness and targeted humancapital investment—rather than innovation proxies alone—represent the most reliable nearterm drivers of per capita income growth at an intermediate stage of development