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Exploring the Relationship between Government R & D Expenditures and Economic Growth in a Global Perspective: A PMG Estimation Approach

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  • Abida Hafeez
  • Karim Bux Shah Syed
  • Fiza Qureshi

Abstract

This paper analyses the impact of research and development (R&D) expenditures on economic growth in a global perspective utilizing the data of 60 developed and developing countries from 1998 to 2015. This study employs the Pooled Mean Group Estimators (PMGE) proposed by Pesaran et al. (1999) to find a heterogeneous trend among different groups of countries. The findings suggest that there exist a significant & positive relationship amongst R&D spending and economic growth globally, which appears consistent with economic theory. The study also confirms both long and short run relationship of economic growth and expenditures on R& D except that the short-run coefficient appears insignificant in the case of developing countries. This study implies that economies with higher R& D spending tend to have higher economic growth. This study has retentive policy implications for management and policymakers who could make important endeavors at the national level in this regard.

Suggested Citation

  • Abida Hafeez & Karim Bux Shah Syed & Fiza Qureshi, 2019. "Exploring the Relationship between Government R & D Expenditures and Economic Growth in a Global Perspective: A PMG Estimation Approach," International Business Research, Canadian Center of Science and Education, vol. 12(4), pages 163-174, April.
    • Handle: RePEc:ibn:ibrjnl:v:12:y:2019:i:4:p:163-174
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    References listed on IDEAS

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    More about this item

    Keywords

    economic growth; pooled mean group; R & D expenditures; panel-cointegration;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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