Different Impacts of Government Expenditure for Education and Technology on Economic Growth: Comparative Evidence from Four Countries

Education is the most crucial determinant of economic growth, and the link between education and economic growth has always been an important field of economics research. Technological innovation is the source of promoting economic growth and the key to transforming economic growth mode. The aim of the paper is to explore the effects of education expenditure and technology investment on economic growth. The article used annual time series data of four countries (China, Finland, Germany, and Russia) from the period 1996 - 2018 on government expenditure on education (% of GDP), GDP per capita annual growth (GDPPCAG), government expenditure on R&D (GERD), control carbon dioxide emissions (𝐶𝑂₂) and the whole data is sourced from WDI of the World Bank. The results found the contribution rate of science and technology expenditures to per capita GDP growth is very high and a stable and long-term relationship between expenditures of science and technology and per capita GDP growth, with significant positive effects among all countries employed. There is a long-term stable relationship between education expenditure and economic development, but education expenditure to economic growth is smaller than that of science and technology expenditure relatively.