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The impact of research and development (Ramp;D) expenditure is crucial for understanding contemporary economic development strategies. This study investigates the relationship between Ramp;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 Ramp;D expenditure (5.71% of GDP in 2020). The objective is to evaluate the impact of Ramp;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 Ramp;D investment on economic growth across various countries. Ordinary least squares (OLS) regression analyzes the association between Ramp;D expenditure and GDP levels. Granger causality tests are utilized to investigate the causal relationships. The results demonstrate a significant positive relationship between Ramp;D expenditure and GDP across all studied countries. Furthermore, the analysis reveals that GDP growth stimulates increased Ramp;D investments in Azerbaijan and Armenia, as evidenced by Granger causality tests. To sum up, this paper underscores the critical role of Ramp;D spending in driving economic development and highlights the necessity for policy initiatives focused on strengthening Ramp;D frameworks.
Gulaliyev et al. (Thu,) studied this question.