Investigation of the Effect of R&D Expenditures on Economic Growth in OECD Countries by Panel Cointegration

Abstract

Research and development (R&D) activities, which are considered as the important power of economic growth, have an important role for the country's economy. The endogenous growth theories, which have become popular since the 1980s, have revealed the role of R&D in economic growth. The effects of technology and R&D activities on economic growth (GDP) have been studied for a long time in the economics literature. In the new economic order emerging in the globalization process, it is possible to increase the production of products with high added value, especially through R&D activities. Therefore, the shares allocated to R&D and the expenditures made stand out as an important factor in the realization of growth. As the share of R&D expenditures on GDP increases, it is thought that technological innovation and development will increase and contribute to sustainable growth. In this study, the relationship between R&D expenditures and economic growth was examined with a panel data model for 33 OECD countries over the period of 2010-2018. As a result of the analysis, it has been revealed that R&D expenditures have a positive effect on growth. For this reason, it can be said that countries aiming to accelerate economic growth as a policy recommendation should focus on R&D investments.

Keywords

• r&d
• economic growth
• panel data analysis
• oecd