R&D expenditure and its macroeconomic effects: A comparative study of Israel and South Caucasus countries
The impact of research and development (R&D) expenditure is crucial for understanding contemporary economic development strategies. This study investigates the relationship between R&D spending as a percentage of GDP and economic growth, focusing on the South Caucasus countries (Azerbaijan, Georgia, and Armenia) and Israel, which is notable for its substantial R&D expenditure (5.71% of GDP in 2020). The objective is to evaluate the impact of R&D expenditure on economic development through the application of rigorous empirical methods. By employing a quantitative approach, this study aims to offer a detailed analysis of the impact of R&D investment on economic growth across various countries. Ordinary least squares (OLS) regression analyzes the association between R&D expenditure and GDP levels. Granger causality tests are utilized to investigate the causal relationships. The results demonstrate a significant positive relationship between R&D expenditure and GDP across all studied countries. Furthermore, the analysis reveals that GDP growth stimulates increased R&D investments in Azerbaijan and Armenia, as evidenced by Granger causality tests. To sum up, this paper underscores the critical role of R&D spending in driving economic development and highlights the necessity for policy initiatives focused on strengthening R&D frameworks.
Authors
- Naila Sultanova (ORCID: https://orcid.org/0009-0009-5316-3085)
- Ramil I. Hasanov (ORCID: https://orcid.org/0000-0003-4267-7039)
- Mayis Gulaliyev (ORCID: https://orcid.org/0000-0001-7614-7322)
- Lale Ibrahimli (ORCID: https://orcid.org/0000-0003-1338-7673)
- Narmin Guliyeva (ORCID: https://orcid.org/0000-0002-2415-3728)
Institutions
- Western Caspian University (AZ)
- Azerbaijan State University of Economics (AZ)
- Azerbaijan University of Architecture and Construction (AZ)
- University of Technology of Azerbaijan
- Ganja State University (AZ)
- Azerbaijan University (AZ)
Publication Details
- Journal
- Public and Municipal Finance
- Published
- 2024-09-26
- DOI
- https://doi.org/10.21511/pmf.13(2).2024.05
- Citations
- 6
- Primary Topic
- Economic Growth and Productivity
- Type
- article
- Field-Weighted Citation Impact
- 6.78