Measuring the impact of research and development spending on economic growth in China during the period (1996-2023) using ARDL methodology

Abstract

This paper provides an econometric study of the effect of research and development (R&D) expenditure on economic growth in China during the period (1996-2023); using ARDL methodology, we noticed that lagging R&D spending has a positive and statistically significant effect. We also observed that when the number of lags increases, there is a rotation in the sign from one year to the next. The reason for this rotation is due to the presence of a non-additive mediating variable. As for the value of the positive cubic term, the relationship is S-shaped, meaning that the impact of R&D accelerates after a critical threshold, which may reflect the stage of technological maturity, where innovations begin to generate non-linear effects. We may call it the recovery stage, where growth begins to accelerate again due to the effects of disruptive innovation, which targets weak or marginalized markets and creates new demand from them.