Does Research and Development Expenditure Incite Quality of Economic Growth? Evidence from China

Abstract

A recent economic and political history has extensively shown that high growth alone does not necessarily lead to better social outcomes. Quality of growth has, therefore, become a popular lemma over the past few years. Most countries are now concentrating on how to improve the quality of growth rather than the quantity. This study, therefore, aimed at assessing the impact of innovation on the quality of economic growth in China, using Research and Development Expenditure as an indicator for innovation, and Human Development Index as an indicator for quality of economic growth. A time series data covering a period from 2000 to 2019, and the Ordinary Least Square method of estimation were used in the regression analysis. The results of the study provide evidence that research and development expenditure is a vital factor for ensuring quality of economic growth. The findings of the study is very essential for policymakers in China, as China in its 14th Five-Year plan, intends to increase its spending on research and development to enhance innovation activities. This provides adequate evidence for the government of China, as well as other emerging economies, that as a country increases its investment in research and development, it stands a better chance for enhancing its quality of growth, and also achieving its Sustainable Development Goals. The study also adds new empirical evidence to the existing literature on innovation and economic growth.