Energy, Finance, and Innovation in High-Income Countries: Short- and Long-Run Evidence from the ARDL–ECM Framework

This study investigates the dynamics of economic growth in high-income countries by examining the roles of energy consumption, financial development, innovation intensity, and research and development (R&D) expenditure. The analysis applies the autoregressive distributed lag (ARDL) framework and its associated error correction model (ECM) to estimate both the short-run adjustments and the long-run equilibrium relationships among the variables over the period 2000–2023. The results show that energy consumption and innovation have significant and immediate effects on GDP growth, indicating their central importance for short-run economic performance. By contrast, financial development and R&D expenditure exert positive but lagged effects, suggesting that their contributions materialize gradually in the medium term. The ECM results confirm the existence of a stable long-run relationship and highlight the limited short-run influence of financial development and R&D, reinforcing the need to prioritize energy and innovation policies for immediate growth impacts. The findings provide new empirical evidence and policy insights, emphasizing that high-income countries should pair short-term strategies, such as strengthening energy efficiency and innovation capacity, with long-term investments in financial development and R&D to support sustained economic growth.