Financial expansion and economic performance: evaluating the role of research and development expenditures for China

• Published in: Economic research - Ekonomska istraživanja Vol. 36; no. 2
• Main Authors: Xie, Peijun, Huang, Jun
• Format: Journal Article Paper
• Language: English
• Published: Pula Routledge 10.07.2023; Taylor & Francis Ltd; Taylor and Francis Group i Sveučilište Jurja Dobrile u Puli, Fakultet ekonomije i turizma Dr. Mijo Mirković
• Subjects: CCR; DOLS; Econometrics; Economic development; Economic performance; Economic theory; Expenditures; financial expansion; FMOLS; GDP; Gross Domestic Product; Natural resources; Policy making; R & D expenditures; R&D; Research & development; Time series; Variables
• ISSN: 1331-677X; 1848-9664
• DOI: 10.1080/1331677X.2022.2137826

This research targets to investigate the link between research and development expenditures and financial expansion along with other control variables such as natural resources (NRS) and gross domestic product (GDP) for China's economy over the period of 1984-2021. To analyse china's economy, the authors employ time series data relevant to econometrics approaches for long-run relationships (FMOLS, DOLS, and CCR) to monitor changes over time between variables, which is important in actual studies. The models' primary findings are as follows: The cointegration test confirms that there are log-run associations among the targeted variables. Our targeted results show that Research and development expenditures have the largest influence on the financial expansion of the economy. The control variables like NRS decreases financial expansion while GDP boosts financial expansion in china. These results imply that it is very important for policymakers further to change their policy concerning investment in R&D activities.