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The Effects of Research and Development (R&D) Investments on Sustainable Economic Growth: Evidence from OECD Countries (1996-2015)

Author

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  • Yazgan Şekip

    () (Department of Economics, Agri Ibrahim Çeçen University, Ağrı, Turkey)

  • Yalçinkaya Ömer

    () (Department of Economics, Agri Ibrahim Çeçen University, Ağrı, Turkey.)

Abstract

This study is devoted to the empirical analysis by second generation panel data analysis of the effects of the R&D investment variables in different qualifications in OECD countries grouped as OECD-20 and OECD-9 based on the income levels of the economic growth for the period of 1996-2015. Within this context, the purpose of this study is to evaluate whether or not the economic growth performances of OECD-20 and OECD-9 countries have a sustainable structure that endogenizes the technological advancements and occurs by the increments in average factor productivity. At the end of the paper it is determined that all the R&D variables in different qualifications of the OECD-20 group have a higher income level in sample period and have positive and statistically significant effects on the economic growth. On the other hand, only the private sector, universities and the total R&D investments have positive and statistically significant effects on the economic growth of the OECD-9 group which has comparatively lower income level. However, it is specified that the size of the positive and statistically significant effects of the R&D investment variables in different qualifications is more than two times bigger in the OECD-20 group as opposed to the OECD-9 group. These results reveal that the economic performances of OECD-20 countries in the investigated period have a more substantial relation with the qualified and sustainable structure that endogenizes the technologic advancements and occurs by the increments in average factor productivity. All of this shows that the R&D investments also are substantially sufficient to change the long-term economic growth performances and income levels of the countries in OECD-20 and OECD-9 groups.

Suggested Citation

  • Yazgan Şekip & Yalçinkaya Ömer, 2018. "The Effects of Research and Development (R&D) Investments on Sustainable Economic Growth: Evidence from OECD Countries (1996-2015)," Review of Economic Perspectives, Sciendo, vol. 18(1), pages 3-23, March.
  • Handle: RePEc:vrs:reoecp:v:18:y:2018:i:1:p:3-23:n:1
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    More about this item

    Keywords

    R&D Investments; Technological Advancement; Sustainable Economic Growth; Endogenous Growth Theories; OECD Countries; Second Generation Panel Data Analysis;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • C49 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Other
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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