INVESTMENT IN INNOVATION AND OFFICIAL DEVELOPMENT ASSISTANCE AS DETERMINANTS OF SUSTAINABLE DEVELOPMENT IN EUROPEAN UNION COUNTRIES
Abstract
An article examines the role of investment in innovation and official development assistance as key factors in ensuring sustainable development in the European Union. Particular attention is paid to the analysis of the long-term relationship between spending on scientific research and development, the level of innovation activity and structural changes in the economies of EU member states. It is substantiated that investment in R&D forms internal sources of economic growth, while contributing to an increase in labor productivity. In addition, it is found that investment in R&D ensures technological renewal of production and forms a transition to an environmentally friendly development model. At the same time, official development assistance is considered an important external tool for supporting global economic stability and spreading the principles of sustainable development. The empirical part of the study is based on the use of panel data for 2004-2025 and the application of econometric modeling with fixed effects and taking into account the interaction between variables. The results obtained show that the impact of innovative investments on sustainable economic growth is statistically significant and stable, while the effect of official development assistance alone is limited. At the same time, the presence of a synergistic effect is established, which manifests itself in the strengthening of the impact of innovations when domestic investments are combined with external financing. The key role of human capital as a factor of the absorptive capacity of the economy is emphasized. It is established that the effectiveness of the impact of investments in R&D depends on the institutional environment and the level of integration of national economies into the European research space. It is revealed that countries with a higher level of innovation infrastructure demonstrate more stable rates of economic growth even in conditions of external shocks. The need to coordinate financial instruments for supporting innovations with long-term strategic priorities of the EU development, which ensures increased efficiency in the use of resources, is also substantiated. It is concluded that effective provision of sustainable development in EU countries is possible only under conditions of a comprehensive combination of innovation policy, human capital development and rational use of international financial resources.
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