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Economic Growth And R&D Expenditure In Romania. An Empirical Research

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  • Mariana SEHLEANU
  • Ramona SIMUT
  • Ciprian SIMUT

Abstract

Research and Development (R&D) seems to be an important element in economic growth, provided it is coupled with several other factors. The benefits of R&D are quantifiable in the long run, as well as in the short run. R&D brings benefits not only at a local level, but also at a regional level, and if done right, it influences nearby countries or states. Private and public funding for R&D are different and bring in different results. As for the source of funding, it seems that government funding is less efficient, compared to private funding. Either way, R&D is beneficial for governments because they can exploit the research output. Higher education produces more R&D, if properly funded, and business enterprises can either exploit or grow around R&D and its output. The aim of this study is to investigate the relationship between the economic growth and the R&D Expenditure in Romania. We used the Johansen cointegration test, VECM model and Granger causality. The findings suggest that R&D Expenditure in the Business enterprise sector corrects the previous period disequilibrium faster than the other two variables, so 10% of this disequilibrium is corrected within the first year from R&D Expenditure in Business enterprise to GDP. In the short-run, the R&D Expenditure in the Business enterprise sector does not influence the GDP, while the other two variables, R&D Expenditure in the Higher Education sector and R&D Expenditure in the Government sector to GDP, influence the GDP in the short run.

Suggested Citation

  • Mariana SEHLEANU & Ramona SIMUT & Ciprian SIMUT, 2021. "Economic Growth And R&D Expenditure In Romania. An Empirical Research," Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 15(1), pages 231-242, November.
    • Handle: RePEc:rom:mancon:v:15:y:2021:i:1:p:231-242
    DOI: 10.24818/IMC/2021/02.02
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    References listed on IDEAS

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