Ramil Hasanov

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.

Bank deposits are vital for the economy, serving as a primary source of funding for banks that facilitate lending, investment, consumption, and overall economic growth. This article aims to examine how oil price fluctuations and inflation, two critical macroeconomic variables, influence bank deposits in Azerbaijan, an energy-exporting country. The primary purpose is to reveal the extent to which these factors, particularly in the context of Azerbaijan’s role as an energy exporter, affect the stability and liquidity of the banking sector. Using the Autoregressive Distributed Lag (ARDL) model and Granger causality testing, the study analyzes the dynamic relationships among these variables. The findings demonstrate a significant long-term relationship and causal effects between oil prices, inflation, and bank deposits. Specifically, a one-unit increase in oil prices results in a 0.057-unit rise in bank deposits, underscoring the positive impact of oil price increases on banking sector liquidity. Conversely, a one-unit increase in inflation decreases bank deposits by 0.812 units in the long term, highlighting inflation’s detrimental effect on financial stability.