This study employs the generalized least squares (GLS) method to investigate the impact of economic profit growth on economic performance in
Uganda over the period 1970 to 2020. Specifically, the study explores the
relationships among economic profit growth, economic growth, and
profit rate growth. The data utilized in this analysis were sourced from
the United Nations database. The study addresses the persistent
inconclusiveness in existing literature regarding the interplay between
innovation and profit growth, and vice versa. This gap serves as the
primary motivation for this research, aiming to provide more definitive
insights. Empirical results indicate that the investment-to-capital ratio
exhibited the most significant direct contribution to economic profit
growth during the studied period, followed by advancements in
innovation and technological progress. Consequently, growth in
household consumption emerged as the leading contributor to economic
profit growth, ceteris paribus, followed by innovation, technological
progress, disposable income, and real income (gross domestic product).
The findings suggest that, to achieve accelerated economic growth,
Uganda needs to prioritize growth in economic profits, employment, the
investment-to-capital ratio, innovation, and technological development.