THE EFFECTS OF RandD EXPENDITURES ON GROWTH: A PANEL DATA ANALYSIS FOR OECD COUNTRIES

Abstract

Purpose We examine RandD based models of endogenous growth theories to test the effects of RandD activities on economic growth and foreign trade. Design/Methodology/Approach The data were analyzed by panel data techniques. The RandD sector was represented by three variables; gross expenditure on RandD, the number of researchers employed in RandD sector, and the number of patents. Findings Results show that gross expenditure on Rand D, the number of researchers employed in RandD sector, and the number of patents have significant and positive effect on GDP and export. Practical Implications Since assumption of neoclassical growth theory is incapable for explanation of long-run growth, countries should invest on research and development activities for sustainable economic growth. Originality/value This paper, empirically, contributes to the relationship between RandD expenditures and export performance of OECD countries, on which the studies are scarce.