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The Cyclical and Nonlinear Impact of R&D and Innovation Activities on Economic Growth in OECD Economies: a New Perspective

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  • Manzoor Ahmad

    (Nanjing University
    Abdul Wali Khan University Mardan)

  • Jianghuai Zheng

    (Nanjing University)

Abstract

This study empirically tested the cyclical and nonlinear nexus between innovation and economic growth using simultaneous equation modeling approach for thirty-six OECD economies. Some of the key findings on the cyclical innovation-growth nexus are as follows. First, results indicated that a positive shock to R&D expenditures (R&DE) and patents was positively connected with economic growth in the boom period. Second, in the recession period, a negative shock to R&DE and patents was negatively linked with economic growth. Third, the estimated results suggested that positive shocks to R&DE and patents have a more significant and positive impact on economic growth than the negative shock to R&DE and patents. Fourth, a positive shock to patents has a greater positive impact on economic growth than the impact of a negative shock to patents on economic growth. Fifth, the findings showed that the nexus between R&DE, patents, and economic growth was pro-cyclical among OECD countries.

Suggested Citation

  • Manzoor Ahmad & Jianghuai Zheng, 2023. "The Cyclical and Nonlinear Impact of R&D and Innovation Activities on Economic Growth in OECD Economies: a New Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(1), pages 544-593, March.
    • Handle: RePEc:spr:jknowl:v:14:y:2023:i:1:d:10.1007_s13132-021-00887-7
    DOI: 10.1007/s13132-021-00887-7
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