Government Innovations and Economic growth: Evidence from Slovak Republic
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Keywords:
Economic Growth, Government Innovation Policy, Innovations, R&D Expenditures, CorrelationAbstract
Innovation is one of the key drivers of economic growth in many countries. Government
innovation policy influences not only economic growth but also the behavior of economic agents,
especially firms. Many studies have focused on estimating the relationship between innovations and
Using covariance-correlation analysis, we estimate the relationship between economic growth and
innovation (expressed as the share of government R&D expenditure in GDP) in the Slovak Republic over
the period 1995-2022. We show that the correlation is both moderate and positive, representing the fact
that innovation can boost economic growth in the Slovak Republic. The implication of the paper is that
innovation can promotes economic growth in the short run, but not in the long run. The contribution is
also the finding that, to a limited extent, government innovation policy mitigates cyclical fluctuations and
acts as a stabilizer in the economy.
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