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The Impact of R&D Expenditures on Economic Growth in Türkiye: New Evidence from Machine Learning Method

Year 2024, PRODUCTIVITY FOR INNOVATION, 107 - 118, 15.01.2024
https://doi.org/10.51551/verimlilik.1344757

Abstract

Purpose: This study analyzes the impacts of R&D expenditures on economic growth in Türkiye.
Methodology: In this study, we explore the impact of R&D expenditure on economic growth in Türkiye. Annual time series from 1990 to 2021 are considered for this research examination based on the data availability. R&D expenditure, Gross Domestic Product (GDP) per capita, gross fixed capital formation, labor force, and tertiary ratio variables are used for the analysis and obtained from the World Bank. Based on machine learning, analyses were conducted using the Kernel Regularized Least Square method.
Findings: The empirical analysis using KRLS shows that higher spending on research and development leads to a significant boost in economic growth. Furthermore, labor force participation, school enrolment (tertiary) ratio, and gross fixed capital formation are all significantly and positively associated with economic growth in Türkiye.
Originality: The contribution of the paper is twofold: (1) it provides new scientific evidence based on the machine learning econometric method, the Kernel Regularized Least Square (KRLS); (2) many papers in the literature have only examined the relationship between R&D expenditures and economic growth, without controlling for other variables. We have used possible control variables such as labor force participation rate, school enrolment (tertiary) ratio, and gross fixed capital formation, which are also linked to economic growth models.

References

  • Abbas, Q., Nurunnabi, M., Alfakhri, Y., Khan, W., Hussain, A. and Iqbal, W. (2020). “The Role of Fixed Capital Formation, Renewable and Non-Renewable Energy in Economic Growth and Carbon Emission: A Case Study of Belt and Road Initiative Project”, Environmental Science and Pollution Research, 27, 45476-45486.
  • Aghion, P. and Howitt, P.A. (1990). “Model of Growth Through Creative Destruction”, NBER Working Paper, No. 3223, Cambridge, Mass.
  • Akıncı, M., and Sevinç, H. (2013). “Ar-Ge Harcamaları ile Ekonomik Büyüme Arasındaki İlişki: 1990-2011 Türkiye Örneği”, Uluslararası Sosyal Araştırmalar Dergisi, 6(27), 7-17.
  • Ali, T., Kiani, A., Bashir, T. and Khan, T.N. (2021). “R&D Expenditure as an Accelerator of Economic Growth with Special Reference to Developing Countries”, Journal of Business and Social Review in Emerging Economies, 7(3), 561-589.
  • Altin, O. and Kaya, A. (2009). “Türkiye’de Ar-Ge Harcamaları ve Ekonomik Büyüme Arasındaki Nedensel İlişkinin Analizi”, Ege Akademik Bakış, 9(1), 251-259.
  • Arrow, K.J. (1962). “The Economic Implications of Learning by Doing”, The Review of Economic Studies, 29(3), 155-173.
  • Barro, R.J. (1990). “Government Spending in a Simple Model of Endogeneous Growth”, Journal of Political Economy, 98(5, Part 2), 103-125.
  • Bayarçelik, E.B. and Taşel, F. (2012). “Research and Development: Source of Economic Growth”, Procedia - Social and Behavioral Sciences, 58, 744-753.
  • Blanco, L.R., Gu, J. and Prieger, J.E. (2016). “The Impact of Research and Development on Economic Growth and Productivity in the US States”, Southern Economic Journal, 82(3), 914-934.
  • Bozkurt, C. (2015). “R&D Expenditures and Economic Growth Relationship in Türkiye”, International Journal of Economics and Financial Issues, 5(1), 188-198.
  • Chatterji, M. (1998). “Tertiary Education and Economic Growth”, Regional Studies, 32(4), 349-354.
  • Coe, D.T., and Helpman, E. (1995). “International R&D Spillovers”, European Economic Review, 39(5), 859-887.
  • Ehrlich, I. (1990). “The Problem of Development: Introduction”, Journal of Political Economy, 98(5), 1-11.
  • Falk, M. (2007). “R&D Spending in the High-Tech Sector and Economic Growth”, Research in Economics, 61(3), 140-147.
  • Ferwerda, J., Hainmueller, J. and Hazlett, C.J. (2017). “Kernel-Based Regularized Least Squares in R (KRLS) and Stata (Krls)”, Journal of Statistical Software, 79, 1-26.
  • Griffith, R., Redding, S. and Reenen, J.V. (2004). “Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries”, Review of Economics and Statistics, 86(4), 883-895.
  • Griliches, Z. (1979). “Issues in Assessing the Contribution of Research and Development to Productivity Growth”, The Bell Journal of Economics, 10(1), 92-116.
  • Griliches, Z. (1991). “The Search for R&D Spillovers”, National Bureau of Economic Research Working Paper Series (No. 3768).
  • Grossman, G.M. and Helpman, E. (1990). “Comparative Advantage and Long-Run Growth”, The American Economic Review, 80(4), 796-815.
  • Grossman, G.M. and Helpman, E. (1991). “Innovation and Growth in the Global Economy”, The MIT press, Cambridge, MA.
  • Grossman, G.M. and Helpman, E. (1994). “Endogenous Innovation in the Theory of Growth”, Journal of Economic Perspectives, 8(1), 23-44.
  • Guloglu, B. and Tekin, R.B. (2012). “A Panel Causality Analysis of the Relationship among Research and Development, Innovation, and Economic Growth in High-Income OECD Countries”, Eurasian Economic Review, 2(1), 32-47.
  • Gumus, E. and Celikay, F. (2015). “R&D Expenditure and Economic Growth: New Empirical Evidence”, Margin: The Journal of Applied Economic Research, 9(3), 205-217.
  • Hainmueller, J. and Hazlett, C. (2014). “Kernel Regularized Least Squares: Reducing Misspecification Bias with a Flexible and Interpretable Machine Learning Approach”, Political Analysis, 22(2), 143-168.
  • Horowitz, I. (1967). “The Relationship Between Interstate Variations in the Growth of R&D and Economic Activity”, IEEE Transactions on Engineering Management, 3, 135-141.
  • Jones, C.I. and Williams, J.C. (2000). “Too Much of a Good Thing? The Economics of Investment in R&D”, Journal of Economic Growth, 5, 65-85.
  • Karaalp, H.S.O. (2017). “Human Capital and Economic Growth: Bounds and Causality Analysis for Turkey”, Siyaset, Ekonomi ve Yönetim Araştırmaları Dergisi, 5(1), 21-32.
  • Korkmaz, S. (2010). “Türkiye’de Ar-Ge Yatırımları ve Ekonomik Büyüme Arasındaki İlişkinin VAR Modeli ile Analizi”, Yaşar Üniversitesi E-Dergisi, 5(20), 3320-3330.
  • Kuznets, S. (1955). “Economic Growth and Income Inequality”, American Economic Review, 45, 1-28
  • Lucas, R.E. (1988). “On the Economics of Economic Development”, Journal of Monetary Economics, 22(1), 3-42.
  • Minviel, J.J. and Ben Bouheni, F. (2022). “The Impact of Research and Development (R&D) on Economic Growth: New Evidence from Kernel-Based Regularized Least Squares”, The Journal of Risk Finance, 23(5), 583-604.
  • Moustapha, M.A.M. and Yu, Q. (2021). “Innovation Effect Through Research and Development on Economic Growth in 35 OECD Countries”, Journal on Innovation and Sustainability Risus, 11(4), 159-166.
  • Ogunleye, O.O., Owolabi, O.A., Sanyaolu, O.A. and Lawal, O.O. (2017). “Human Capital Development and Economic Growth in Nigeria”, Journal of Business Management, 3(8), 17-37.
  • Peng, L. (2010). “Study on Relationship Between R&D Expenditure and Economic Growth of China”, Proceedings of the 7th International Conference on Innovation & Management, 1725-1728.
  • Pessoa, A. (2010). “R&D and Economic Growth: How Strong is the Link?”, Economics Letters, 107(2), 152-154.
  • Romer, P.M. (1986). “Increasing Returns and Long-Run Growth”, Journal of Political Economy, 94(5), 1002-1037.
  • Romer, P. M. (1990). “Endogenous Technological Change”, Journal of Political Economy, 98(5, Part 2), S71-S102.
  • Samimi, A.J. and Alerasoul, S.M. (2009). “R&D and Economic Growth: New Evidence from Some Developing Countries”, Australian Journal of Basic and Applied Sciences, 3(4), 3464-3469.
  • Schmookler, J. (1966). “Invention and Economic Growth”, Harvard University Press, Cambridge, MA and London, England.
  • Schumpeter, J.A. (1942). “Capitalism, Socialism and Democracy”, Harper and Brothers, New York.
  • Solow, R.M. (1956). “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics, 70(1), 65-94.
  • Solow, R.M. (1957). “Technical Change and the Aggregate Production Function”, The Review of Economics and Statistics, 39(3), 312-320.
  • Stokey, N.L. (1995). “R&D and Economic Growth”, The Review of Economic Studies, 62(3), 469-489.
  • Susanto, J., Khoirudin, R., Ningsih, S.K. and Lubis, F.R.A. (2023). “The Role of Research and Development (R&D) on Gross Domestic Products (GDP) (Case Study USA, China, Japan, Germany and the UK)”, Journal of International Conference Proceedings. 6(1), 1-13.
  • Sylwester, K. (2001). “R&D and Economic Growth”, Knowledge, Technology & Policy, 13, 71-84.
  • Taban, S., and Şengür, M. (2014). “Türkiye’de Ar-Ge ve Ekonomik Büyüme”, AİBÜ Sosyal Bilimler Enstitüsü Dergisi, 14(1), 355-376.
  • Tsai, C.L., Hung, M.C. and Harriott, K. (2010). “Human Capital Composition and Economic Growth”, Social Indicators Research, 99, 41-59.
  • Ulku, H. (2004). “R&D, Innovation, and Economic Growth: An Empirical Analysis”, IMF Working Papers, 2004(185),
  • Wakelin, K. (2001). “Productivity Growth and R&D Expenditure in UK Manufacturing Firms”, Research Policy, 30(7), 1079-1090.
  • Warsame, A.A., Abdi, A.H., Amir, A.Y. and Azman-Saini, W.N.W. (2023). “Towards Sustainable Environment in Somalia: The Role of Conflicts, Urbanization, and Globalization on Environmental Degradation and Emissions”, Journal of Cleaner Production, 406, 136856.
  • Wilson, M.C. and Wright, J. (2017). “Autocratic Legislatures and Expropriation Risk”, British Journal of Political Science, 47(1), 1-17.
  • Wu, Y. and Zhou, L. (2007). “Cointegration and Causality between R&D Expenditure and Economic Growth in China: 1953-2004”, International Conference on Public Administration, 76, 869-876.
  • Yaylalı, M., Akan, Y. and Işık, C. (2010). “Türkiye’de Ar&Ge Yatırım Harcamaları ve Ekonomik Büyüme Arasındaki Eş-Bütünleşme ve Nedensellik İlişkisi: 1990-2009”, Bilgi Ekonomisi ve Yönetimi Dergisi, 5(2), 13-26.
  • Zachariadis, M. (2003). “R&D, Innovation, and Technological Progress: A Test of the Schumpeterian Framework without Scale Effects”, Canadian Journal of Economics/Revue Canadienne D'économique, 36(3), 566-586.

Türkiye'de Ar-Ge Harcamalarının Ekonomik Büyüme Üzerindeki Etkisi: Makine Öğrenmesi Yönteminden Yeni Kanıtlar

Year 2024, PRODUCTIVITY FOR INNOVATION, 107 - 118, 15.01.2024
https://doi.org/10.51551/verimlilik.1344757

Abstract

Amaç: Bu çalışma, Türkiye'de Ar-Ge harcamalarının ekonomik büyüme üzerindeki etkilerini analiz etmektedir.
Yöntem: Bu çalışmada, Türkiye'de Ar-Ge harcamalarının ekonomik büyüme üzerindeki etkisi araştırılmaktadır. Veri mevcudiyetine bağlı olarak bu araştırmada 1990'dan 2021'e kadar olan yıllık zaman serileri kullanılmıştır. Ar-Ge harcaması, kişi başına Gayri Safi Yurtiçi Hasıla (GSYH), gayri safi sabit sermaye oluşumu, işgücü ve okula kayıt (yükseköğretim) oranı değişkenleri Dünya Bankası'ndan temin edilmiştir. Makine öğrenimine dayalı olarak, analizler Kernel Düzenlenmiş En Küçük Kare yöntemi kullanılarak gerçekleştirilmiştir.
Bulgular: KRLS kullanılarak yapılan ampirik analiz, araştırma ve geliştirmeye yapılan daha yüksek harcamaların ekonomik büyümede önemli bir artışa yol açtığını göstermektedir. Ayrıca, işgücüne katılım, okula kayıt (yükseköğretim) oranı ve gayrisafi sabit sermaye oluşumu Türkiye'deki ekonomik büyüme ile anlamlı ve pozitif bir şekilde ilişkilidir.
Özgünlük: Bu makalenin katkısı iki yönlüdür: (1) makine öğrenimi ekonometrik yöntemi olan Kernel Düzenlenmiş En Küçük Kare (KRLS) yöntemine dayalı yeni bilimsel kanıtlar sunmaktadır; (2) literatürdeki birçok makale, diğer değişkenleri kontrol etmeden sadece Ar-Ge harcamaları ve ekonomik büyüme arasındaki ilişkiyi incelemiştir. Bu çalışmada, ekonomik büyüme modelleriyle bağlantılı olan işgücüne katılım oranı, okullaşma (yükseköğretim) oranı ve gayrisafi sabit sermaye oluşumu gibi olası kontrol değişkenleri de analizde kullanılmıştır.

References

  • Abbas, Q., Nurunnabi, M., Alfakhri, Y., Khan, W., Hussain, A. and Iqbal, W. (2020). “The Role of Fixed Capital Formation, Renewable and Non-Renewable Energy in Economic Growth and Carbon Emission: A Case Study of Belt and Road Initiative Project”, Environmental Science and Pollution Research, 27, 45476-45486.
  • Aghion, P. and Howitt, P.A. (1990). “Model of Growth Through Creative Destruction”, NBER Working Paper, No. 3223, Cambridge, Mass.
  • Akıncı, M., and Sevinç, H. (2013). “Ar-Ge Harcamaları ile Ekonomik Büyüme Arasındaki İlişki: 1990-2011 Türkiye Örneği”, Uluslararası Sosyal Araştırmalar Dergisi, 6(27), 7-17.
  • Ali, T., Kiani, A., Bashir, T. and Khan, T.N. (2021). “R&D Expenditure as an Accelerator of Economic Growth with Special Reference to Developing Countries”, Journal of Business and Social Review in Emerging Economies, 7(3), 561-589.
  • Altin, O. and Kaya, A. (2009). “Türkiye’de Ar-Ge Harcamaları ve Ekonomik Büyüme Arasındaki Nedensel İlişkinin Analizi”, Ege Akademik Bakış, 9(1), 251-259.
  • Arrow, K.J. (1962). “The Economic Implications of Learning by Doing”, The Review of Economic Studies, 29(3), 155-173.
  • Barro, R.J. (1990). “Government Spending in a Simple Model of Endogeneous Growth”, Journal of Political Economy, 98(5, Part 2), 103-125.
  • Bayarçelik, E.B. and Taşel, F. (2012). “Research and Development: Source of Economic Growth”, Procedia - Social and Behavioral Sciences, 58, 744-753.
  • Blanco, L.R., Gu, J. and Prieger, J.E. (2016). “The Impact of Research and Development on Economic Growth and Productivity in the US States”, Southern Economic Journal, 82(3), 914-934.
  • Bozkurt, C. (2015). “R&D Expenditures and Economic Growth Relationship in Türkiye”, International Journal of Economics and Financial Issues, 5(1), 188-198.
  • Chatterji, M. (1998). “Tertiary Education and Economic Growth”, Regional Studies, 32(4), 349-354.
  • Coe, D.T., and Helpman, E. (1995). “International R&D Spillovers”, European Economic Review, 39(5), 859-887.
  • Ehrlich, I. (1990). “The Problem of Development: Introduction”, Journal of Political Economy, 98(5), 1-11.
  • Falk, M. (2007). “R&D Spending in the High-Tech Sector and Economic Growth”, Research in Economics, 61(3), 140-147.
  • Ferwerda, J., Hainmueller, J. and Hazlett, C.J. (2017). “Kernel-Based Regularized Least Squares in R (KRLS) and Stata (Krls)”, Journal of Statistical Software, 79, 1-26.
  • Griffith, R., Redding, S. and Reenen, J.V. (2004). “Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries”, Review of Economics and Statistics, 86(4), 883-895.
  • Griliches, Z. (1979). “Issues in Assessing the Contribution of Research and Development to Productivity Growth”, The Bell Journal of Economics, 10(1), 92-116.
  • Griliches, Z. (1991). “The Search for R&D Spillovers”, National Bureau of Economic Research Working Paper Series (No. 3768).
  • Grossman, G.M. and Helpman, E. (1990). “Comparative Advantage and Long-Run Growth”, The American Economic Review, 80(4), 796-815.
  • Grossman, G.M. and Helpman, E. (1991). “Innovation and Growth in the Global Economy”, The MIT press, Cambridge, MA.
  • Grossman, G.M. and Helpman, E. (1994). “Endogenous Innovation in the Theory of Growth”, Journal of Economic Perspectives, 8(1), 23-44.
  • Guloglu, B. and Tekin, R.B. (2012). “A Panel Causality Analysis of the Relationship among Research and Development, Innovation, and Economic Growth in High-Income OECD Countries”, Eurasian Economic Review, 2(1), 32-47.
  • Gumus, E. and Celikay, F. (2015). “R&D Expenditure and Economic Growth: New Empirical Evidence”, Margin: The Journal of Applied Economic Research, 9(3), 205-217.
  • Hainmueller, J. and Hazlett, C. (2014). “Kernel Regularized Least Squares: Reducing Misspecification Bias with a Flexible and Interpretable Machine Learning Approach”, Political Analysis, 22(2), 143-168.
  • Horowitz, I. (1967). “The Relationship Between Interstate Variations in the Growth of R&D and Economic Activity”, IEEE Transactions on Engineering Management, 3, 135-141.
  • Jones, C.I. and Williams, J.C. (2000). “Too Much of a Good Thing? The Economics of Investment in R&D”, Journal of Economic Growth, 5, 65-85.
  • Karaalp, H.S.O. (2017). “Human Capital and Economic Growth: Bounds and Causality Analysis for Turkey”, Siyaset, Ekonomi ve Yönetim Araştırmaları Dergisi, 5(1), 21-32.
  • Korkmaz, S. (2010). “Türkiye’de Ar-Ge Yatırımları ve Ekonomik Büyüme Arasındaki İlişkinin VAR Modeli ile Analizi”, Yaşar Üniversitesi E-Dergisi, 5(20), 3320-3330.
  • Kuznets, S. (1955). “Economic Growth and Income Inequality”, American Economic Review, 45, 1-28
  • Lucas, R.E. (1988). “On the Economics of Economic Development”, Journal of Monetary Economics, 22(1), 3-42.
  • Minviel, J.J. and Ben Bouheni, F. (2022). “The Impact of Research and Development (R&D) on Economic Growth: New Evidence from Kernel-Based Regularized Least Squares”, The Journal of Risk Finance, 23(5), 583-604.
  • Moustapha, M.A.M. and Yu, Q. (2021). “Innovation Effect Through Research and Development on Economic Growth in 35 OECD Countries”, Journal on Innovation and Sustainability Risus, 11(4), 159-166.
  • Ogunleye, O.O., Owolabi, O.A., Sanyaolu, O.A. and Lawal, O.O. (2017). “Human Capital Development and Economic Growth in Nigeria”, Journal of Business Management, 3(8), 17-37.
  • Peng, L. (2010). “Study on Relationship Between R&D Expenditure and Economic Growth of China”, Proceedings of the 7th International Conference on Innovation & Management, 1725-1728.
  • Pessoa, A. (2010). “R&D and Economic Growth: How Strong is the Link?”, Economics Letters, 107(2), 152-154.
  • Romer, P.M. (1986). “Increasing Returns and Long-Run Growth”, Journal of Political Economy, 94(5), 1002-1037.
  • Romer, P. M. (1990). “Endogenous Technological Change”, Journal of Political Economy, 98(5, Part 2), S71-S102.
  • Samimi, A.J. and Alerasoul, S.M. (2009). “R&D and Economic Growth: New Evidence from Some Developing Countries”, Australian Journal of Basic and Applied Sciences, 3(4), 3464-3469.
  • Schmookler, J. (1966). “Invention and Economic Growth”, Harvard University Press, Cambridge, MA and London, England.
  • Schumpeter, J.A. (1942). “Capitalism, Socialism and Democracy”, Harper and Brothers, New York.
  • Solow, R.M. (1956). “A Contribution to the Theory of Economic Growth”, The Quarterly Journal of Economics, 70(1), 65-94.
  • Solow, R.M. (1957). “Technical Change and the Aggregate Production Function”, The Review of Economics and Statistics, 39(3), 312-320.
  • Stokey, N.L. (1995). “R&D and Economic Growth”, The Review of Economic Studies, 62(3), 469-489.
  • Susanto, J., Khoirudin, R., Ningsih, S.K. and Lubis, F.R.A. (2023). “The Role of Research and Development (R&D) on Gross Domestic Products (GDP) (Case Study USA, China, Japan, Germany and the UK)”, Journal of International Conference Proceedings. 6(1), 1-13.
  • Sylwester, K. (2001). “R&D and Economic Growth”, Knowledge, Technology & Policy, 13, 71-84.
  • Taban, S., and Şengür, M. (2014). “Türkiye’de Ar-Ge ve Ekonomik Büyüme”, AİBÜ Sosyal Bilimler Enstitüsü Dergisi, 14(1), 355-376.
  • Tsai, C.L., Hung, M.C. and Harriott, K. (2010). “Human Capital Composition and Economic Growth”, Social Indicators Research, 99, 41-59.
  • Ulku, H. (2004). “R&D, Innovation, and Economic Growth: An Empirical Analysis”, IMF Working Papers, 2004(185),
  • Wakelin, K. (2001). “Productivity Growth and R&D Expenditure in UK Manufacturing Firms”, Research Policy, 30(7), 1079-1090.
  • Warsame, A.A., Abdi, A.H., Amir, A.Y. and Azman-Saini, W.N.W. (2023). “Towards Sustainable Environment in Somalia: The Role of Conflicts, Urbanization, and Globalization on Environmental Degradation and Emissions”, Journal of Cleaner Production, 406, 136856.
  • Wilson, M.C. and Wright, J. (2017). “Autocratic Legislatures and Expropriation Risk”, British Journal of Political Science, 47(1), 1-17.
  • Wu, Y. and Zhou, L. (2007). “Cointegration and Causality between R&D Expenditure and Economic Growth in China: 1953-2004”, International Conference on Public Administration, 76, 869-876.
  • Yaylalı, M., Akan, Y. and Işık, C. (2010). “Türkiye’de Ar&Ge Yatırım Harcamaları ve Ekonomik Büyüme Arasındaki Eş-Bütünleşme ve Nedensellik İlişkisi: 1990-2009”, Bilgi Ekonomisi ve Yönetimi Dergisi, 5(2), 13-26.
  • Zachariadis, M. (2003). “R&D, Innovation, and Technological Progress: A Test of the Schumpeterian Framework without Scale Effects”, Canadian Journal of Economics/Revue Canadienne D'économique, 36(3), 566-586.

Details

Primary Language English
Subjects Sustainable Development
Journal Section Articles
Authors

Yasin ACAR 0000-0002-0847-1902

İbrahim KESİCİ 0000-0003-3365-2710

Publication Date January 15, 2024
Submission Date August 17, 2023
Published in Issue Year 2024 PRODUCTIVITY FOR INNOVATION

Cite

APA ACAR, Y., & KESİCİ, İ. (2024). The Impact of R&D Expenditures on Economic Growth in Türkiye: New Evidence from Machine Learning Method. Verimlilik Dergisi107-118. https://doi.org/10.51551/verimlilik.1344757

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