THE RELATIONSHIP BETWEEN R&D EXPENDITURES AND INNOVATIVE DEVELOPMENT: A PANEL DATA ANALYSIS FOR SELECTED OECD COUNTRIES

Year 2019, , 493 - 502, 06.01.2020

İlyas Sözen , M. Batuhan Tufaner

https://doi.org/10.14780/muiibd.665751

Cited By: 1

Abstract

Research and development expenditures are one of the most important variables under consideration
in order to achieve innovative development. Research and development (R&D) expenditures primarily
increase the number of patents applied in a country. The increase in the number of patents applied
contributes to the innovative development of the countries and shifts the countries’ exports from lowtech
products to high-tech products. In this study, the relationship between R&D expenditures, hightech
product exports and the number of patent applications were examined using data from 1997 to
2016 for 25 OECD member countries. In the study where the presence of cross-sectional dependence
among the countries was determined, the stationary of the series were examined by the CIPS method,
and it was determined that the series were stationary in the first difference. The cointegrations of the
series were examined by the Westerlund method, and it was found that they were not cointegrations.
Then, Dumitrescu and Hurlin’s methods were used to test Granger causality. According to the test
results, there is a mutual causality relationship between R&D expenditures and at least one unit of hightech
product exports and R&D expenditures and patent applications.

Keywords

R&D expenditures, innovative development, panel data analysis

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