Jeyhun Hajiyev

Type of article: Research Article

Abstract
This study investigates the causal relationship between research and development (R&D) financing and economic growth in Hong Kong over the period 1998–2022. It examines both public and private R&D expenditures, along with the number of researchers involved in R&D, to evaluate their influence on GDP per capita. Utilizing advanced time series econometric techniques, including the Toda-Yamamoto causality approach and cointegration analysis, the results reveal a statistically significant unidirectional causality from R&D expenditure to GDP per capita (χ² = 26.443, p < 0.01) and from researchers in R&D to GDP per capita (χ² = 38.164, p < 0.01). Additionally, feedback effects were observed, with GDP per capita also causing R&D expenditure (χ² = 17.471, p < 0.01), and R&D expenditure influencing the number of researchers (χ² = 6.718, p < 0.01). These findings highlight the dynamic interplay between financial inputs and human capital in R&D and underscore the importance of sustained investment and a skilled research workforce in fostering long-term economic growth. The evidence supports the strategic role of R&D policy in enhancing productivity and promoting economic sustainability in knowledge-based economies.

Type of the article: Research Article

Abstract
Against the backdrop of economic stagnation, weak external demand, and rising social disparities, this study examines the determinants of economic growth in Germany. Specifically, it investigates the long- and short-run effects of gross capital formation (GCF), government expenditure on education (GEE), and income inequality (GINI) on GDP per capita (GDPPC) over the period 1996–2022. The empirical analysis applies the Autoregressive Distributed Lag (ARDL) bounds testing approach, supported by unit root tests, an error correction model (ECM), and Fully Modified Ordinary Least Squares (FMOLS) estimation. The results confirm the existence of a long-run cointegration relationship among the variables, as the F-statistic of 5.67 surpasses the upper bound critical value at the 1% significance level. The ECM results show that approximately 51.8% of short-run deviations are corrected within one year, indicating a moderate speed of adjustment toward long-run equilibrium. FMOLS estimates suggest that gross capital formation and government expenditure on education are positively associated with GDP per capita in the long run, with coefficients of 0.475 and 0.088, respectively. Income inequality also exhibits a statistically significant but relatively small positive association with economic growth (0.024). In addition, external shocks show asymmetric effects, where financial crises are associated with a 0.055 increase in GDP per capita, while pandemic-related shocks are associated with a 0.089 decrease. Overall, the findings indicate that capital formation and public education expenditure are key long-run correlates of economic growth in Germany, while inequality and external shocks play supplementary but comparatively smaller roles in shaping growth dynamics.