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Heterogeneous effect of high-tech industrial R&D spending on economic growth

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  • Wang, David Han-Min
  • Yu, Tiffany Hui-Kuang
  • Liu, Hong-Quan

Abstract

Empirical evidence has suggested that R&D investment is positively related to economic growth. This paper extends prior research by further examining the heterogeneous effects of R&D expenditures in the high-tech sector on economic growth. This study adopts a quantile regression approach to explore the marginal effect of R&D expenditures in the high-tech sector across different quantiles of the conditional GDP distribution for 23 OECD countries and Taiwan during 1991–2006. Empirical evidences show that the impacts of R&D expenditures in the high-tech sector are heterogeneous across levels of per capita income. High-tech industrial R&D spending has a strong positive effect on GDP per capita at the highest quantile of the distribution. However, all sectors' R&D spending relative to GDP is subject to significant negative returns only when considering the middle income countries. The study provides a more comprehensive understanding of the correlation between R&D investment and economic growth.

Suggested Citation

  • Wang, David Han-Min & Yu, Tiffany Hui-Kuang & Liu, Hong-Quan, 2013. "Heterogeneous effect of high-tech industrial R&D spending on economic growth," Journal of Business Research, Elsevier, vol. 66(10), pages 1990-1993.
    • Handle: RePEc:eee:jbrese:v:66:y:2013:i:10:p:1990-1993
    DOI: 10.1016/j.jbusres.2013.02.023
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