Examining the effects of the relationship between R&D expenditures and basic macroeconomic variables on the Turkish economy

The globalizing world, increasing competition, and rapidly growing economies make Research and Development (R&D) activities more important. The evolving world order, especially in the face of increases in technology, brings R&D investments to the forefront. Although it seems that R&D investments do not directly affect real Gross Domestic Product (GDP), it is known that they actually cause an increase in productivity levels and, in addition, affect sectors and indirectly economic growth by increasing productivity levels. In addition, considering the advantages they will provide in global trade, R&D investments are the most important issue that countries focus on. The employment area they create constitutes one of the most important dynamics. For Turkey, it is very essential to determine the dynamics of R&D investments. Based on this scope, the study examined the determinants of R&D investments in the Turkish economy in the period 1996-2021 through macroeconomic variables using the Hatemi-J (2012) asymmetric causality test. In this context, the dependent variable used was R&D investments, while economic growth, terms of trade and employment were added to the model as independent variables. The results obtained show that only the negative component of employment negatively affected R&D investments for the relevant period, while no relationship was found between them and other variables. These results also show a very striking point for the Turkish economy; R&D expenditures are not at the desired level. First of all, in order for R&D investments to have a channel to affect growth, tax incentives can be applied to increase the incentive for companies to invest in this area. In addition, the training of relevant people should be increased. In addition, investment in renewable energy sources can be supported with environmental policies, which have a rapidly increasing trend today. Keywords: R&D investments, growth, employment, trade, causality