Unraveling the interplay of research investment, educational attainment, human capital development, and economic advancement in technological innovation: A panel VAR approach

This research delves into the intricate dynamics between research and development (R&D) expenditure, educational attainment, human capital development, and economic progress in the realm of technological innovation, utilizing panel data analysis from 1996 to 2022. Nine nations Spain, Sweden, Finland, Denmark, Norway, Netherlands, United Kingdom, France, and South Korea were meticulously chosen based on their renowned public education systems. Through a rigorous application of pairwise Granger causality tests and panel vector autoregression (VAR) analysis, this study validates the hypotheses outlined in existing literature, revealing robust positive associations among R&D expenditure, educational attainment, human capital development, and technological innovation. Notably, the research underscores the pivotal roles of educational achievement and human capital enhancement in fostering innovation capacity, with heightened education levels correlating with increased innovation outcomes. Furthermore, the findings unveil that technological innovation catalyzes economic growth, instigating transformative shifts and societal advancements across the studied nations. These insights emphasize the critical need for targeted policy interventions aimed at bolstering R&D investment, expanding educational access, and cultivating human capital to cultivate innovation-friendly environments conducive to sustainable development and economic prosperity. By leveraging these findings, policymakers can craft strategies to unlock the full potential of technological innovation for fostering inclusive growth and propelling economic development in the analyzed countries' economies.