The impact of r&d incentives and expenditures on economic growth: Panel data analysis

While every development in the field of technology makes human life easier; The investments made in this field are also very effective on the national economies. With this motive, many countries and companies invest in R&D activities, which is one of the most important tools in the development of technology. In previous studies examining the relationship between R&D and economic growth, the financing source of R&D expenditures was not given much importance and was considered as a whole. However, expenditures on R&D activities are carried out by both the public and private sectors. The effects of the financing source of the R&D expenditures on economic growth also constitute an important idea in terms of measuring efficiency and effectiveness in the use of resources. In this study, the effect of public and private sector R&D expenditures on economic growth has been evaluated through empirical results. Empirical analysis covers Türkiye and 30 OECD countries between 2008 and 2020. In the empirical analysis, firstly, the cross-section dependency test is performed; The stationarity of the series was tested with the Pesaran CIPS unit root tests, which is one of the second generation unit root tests, with the detection of inter-unit dependency. Afterwards, the Delta Test was conducted to test the coefficient homogeneity of the units. With the help of CCE and AMG estimators, coefficient significance was tested across the panel and on a country basis. Finally, the relationship between the variables was examined with the Dumitrescu-Hurlin panel causality test. While the results regarding the effect of public R&D allocations on economic growth were found significant throughout the panel; It has been concluded that private sector R&D expenditures are not effective on economic growth, with the exception of certain countries, throughout the panel. In addition, as a result of the causality test, a bidirectional relationship was determined between economic growth and public/private sector R&D expenditures.