The Relationship between R-D Expenditures and Economic Growth: A Case of the Central Asian Republics and Turkey

Abstract

Research and Development (R-D), which means of new technology, new information, new production technics and new product is one of the most important resources of human capital. In endogenously growth theories, the relationship between R-D expenditure and economic growth that was developed by Romer, Grossman-Helpman and Aghion-Howitt, has directed a lot of studies nowadays. Enterprises have to seeking innovation to obtain. This seeking innovation, will raise efficiency and contribute the economic growth. Multiple countries which provide competitive power in science and technology and product technology and information based products, are inside the developed countries today. In this study, the relationship between R-D expenditures and economic growth was tested with panel data analysis for the four Central Asian Republic (Kazakhstan, Kyrgyzstan, Tajikistan and Azerbaijan) and for Turkey. General theory shows that there is a positive relationship between R-D and economic growth. This relationship will analyzed for the this five country. In this context, to test the data’s stability, we made Levin-Lin and Chu (LLC) Panel Unit Root Test. After that, we made Pedroni Cointegration and Panel Granger Causality tests. In the conclusion of the analysis it has been reached that there is a one-sided causal relation from economic growth to R-D expenditures. On the other hand there is no causal relation from R-D expenditures to economic growth.

Keywords

• R-D Expenditures, economic growth, panel data

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