KEY ROLE OF R&D INTENSITY ON POLITICAL AND FINANCIAL STABILITY: EVIDENCE FROM THE G-8 COUNTRIES

Year 2018, Volume: 10 Issue: 2, 1 - 21, 31.12.2018

Yavuz Yıldırım , Feyza Balan

Abstract

The concept of globalization has increased the importance of the expenditures on
R&D, which are well known as the fundamental source for economic growth of
both developing and developed countries. Even though, there have been a great
number of studies subjected to the R&D-economic growth relationship, there have
rarely been studied on the subject of the relationship among R&D, political
stability and financial stability. In this regard, the main scope of this study is to
investigate the causal relationships between R&D intensity and political stability
and financial stability for G-8 countries during the period 1996-2013. Applying
the Dumitrescu-Hurlin panel non-causality test, the empirical findings of this
study shows that there exists a causal relationship running from R&D intensity to
political stability and financial stability. Moreover, this study shows that R&D
intensity has a positive and statistically significant effect on both political and
financial stability of the G-8 countries.

Keywords

Research and Development Expenditures, Political Stability, Financial Stability, Panel Causality

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