The causality relationship between R&D expenditures and Unemployment in Turkey and Azerbaijan

Year 2020, Volume: 1 Issue: 1, 10 - 15, 22.12.2020

Teslime Yıldırım

Abstract

Innovations resulting from R&D activities directly affect the production process positively. The improvement in R&D activities will increase efficiency and productivity, leading to an increase in the total output level. Therefore, developing countries are increasing their expenditures on R&D activities day by day in order to achieve their economic growth targets. However, although it is stated in the literature that increasing R & D activities positively affect growth, there is no consensus on the relationship between R & D expenditures and unemployment. The interaction between R&D and unemployment varies depending on the type of innovation countries experience. In this study, the causality relationship between R&D expenditures and unemployment in developing countries such as Turkey and Azerbaijan is analyzed by Emirmahmutoğlu and Kose (2011) panel causality test. According to the results of the analysis, a statistically significant one-way causality relationship between R&D expenditures and unemployment is determined at the significance level of 5% in Turkey. In Azerbaijan, a statistically significant one-way causality relationship is determined from unemployment to R&D expenditures at the significance level of 5%.

Keywords

R&D Expenditures, Unemployment, Panel Causality

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