R&D expenditure and nominal GDP growth in Uzbekistan: Exploratory evidence from first difference and distributed lag models

Type of the article: Research ArticleAbstractThis study investigates the association between R&D expenditure and nominal GDP growth in Uzbekistan, where R&D intensity (0.12-0.17% of GDP) falls significantly below global benchmarks. Given the short annual series available (2010–2024, N = 15) and measurement constraints, the findings are presented as exploratory associations rather than established causal effects. The dependent variable is based on GDP at current prices, so the estimated dynamics reflect nominal rather than real output growth, and R&D is measured as a share of GDP, which shares a common component with the dependent variable and may mechanically contribute to a negative association. A robustness check using reconstructed absolute R&D expenditure shows that the negative association persists, mitigating though not eliminating this concern. We apply first-difference and distributed-lag models to address non-stationarity issues indicated by Augmented Dickey–Fuller tests. The results suggest a statistically significant negative association between R&D intensity and nominal GDP growth. The first difference model suggests that a 1% increase in R&D intensity is associated with a 0.19% decrease in nominal GDP growth (p < 0.05). The distributed lag model suggests contemporaneous (–0.25%, p < 0.01) and one-year lagged (–0.16%, p < 0.05) negative associations, with a cumulative two-year association of –0.42%. The best-fitting model explains 68% of the variation in nominal GDP growth. The study concludes that enhancing R&D efficiency, building absorptive capacity, and fostering private sector participation are essential prerequisites for achieving positive returns from R&D investment in transitional economies.

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