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.

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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
Controls
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article

R&D expenditure and its macroeconomic effects: A comparative study of Israel and South Caucasus countries

Naila Sultanova, Ramil I. Hasanov, Mayis Gulaliyev, Lale Ibrahimli et al.
6 citations
Public and Municipal Finance
Economic Growth and Productivity
6.78
article

R&D expenditure and its macroeconomic effects: A comparative study of Israel and South Caucasus countries

Naila Sultanova, Ramil I. Hasanov, Mayis Gulaliyev, Lale Ibrahimli, Narmin Guliyeva
article en
6 citations

Abstract

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.

Public and Municipal FinanceVol. 13(2)
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)
Decent work and economic growth
Openalex Percentile: Top 4%
Economic Growth and Productivity
6.78
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