Financing the Future: The Role of Technology Budgets and Innovations in Driving Economic Growth in OECD Countries

Abstract

The study analyzes the dynamic association among technology budgets, innovations and economic growth in 24 (OECD) countries. Based on the theoretical foundations of endogenous growth theory, the research employing panel data for the period 1995 to 2024 by utilizing econometric techniques such as Panel Autoregressive Distributed Lag (PARDL), causality tests and cointegration analysis. The study used GDP as dependent variable while R&D Budget, Patents, Labor Force Participation Rate, Gross Fixed Capital Formation and Institutional Quality Index taken as independent variables.  As global economies increasingly rely on knowledge-based development, the strategic allocation of public and private funds toward R&D budget and technological innovation has emerged as a crucial determinant of long-term productivity and growth. The findings conclude that strategic investments in R&D and innovation, infrastructure drive productivity and competitiveness. Policymakers aiming to optimize fiscal strategies for technological transformation and sustainable development in advanced economies.