Variables Affecting Innovation-Related Competitiveness in Turkey

Innovation’s relation with competitiveness can be considered as a part of its emerging importance for the global economy. Accordingly, the main goal of this quantitative study is to foresee the main “macro” variables affecting Turkey’s innovation-related competitive performance in the long run by considering innovation concept, both in the global and European Union basis. Following the introductory part and literature review, the relationship between innovation and competitiveness has been emphasized in Section 5.3. In Section 5.4, European Union Innovation Scoreboard has been mentioned. In Section 5.5 and the final section of the chapter, innovation concept has been discussed as an extension to Summary of Innovation Index and factors affecting innovation-related competitiveness in Turkey have been examined. First, a brief exploratory factor analysis has been conducted to identify the relevance of selected variables. Then, for investigating factors affecting medium and long-run innovation-related competitiveness in the country, a VAR model has been utilized. Granger’s causality test has also been used to detect the cause-effect relationships between variables. As a result, it has been deduced that basic variables affecting innovation-related competitiveness are the number of patent applications and per capita R&D expenses. Moreover, it is also concluded that the Gross Domestic Product may also be relatively important in the long run.