The relationship between knowledge economy and economic growth: An empirical analysis on Turkey

In recent years, the impacts of important factors of knowledge economy such as innovation, R-G activities, information technologies, patent and other intellectual-property rights on economy have been investigated by theoretical and empirical literature. Growth economists have suggested economic growth is determined by the variables of knowledge economy. According to them, there is a positive relationship between knowledge economy and economic growth. However, econometric studies have revealed mixes results. The aim of this thesis is to analyze the link between knowledge economy and economic growth in Turkey for the period of 1975-2017. Here, patent applications were used as an criteria of knowledge economy. Three different regression equations were constituted. The unit root analyses of the variables were conducted by the ADF, PP and KPSS tests. The presence of cointegration between the variables was examined through the ARDL bounds test. The causal linkages between the variables were determined by using Toda-Yamamoto causality method. Empirical findings taken from the analyses supported that knowledge economy-oriented economic growth approach is valid for Turkish economy. In addition, these results presented important policy implications for Turkey.