The effects of r&d expenditures on international trade and growth in the context of endogenous growth theories

Until end the of the 1980?s empirical analyses had shown that poor countries have not converged to rich countries. For this reason, it has been focused to criticize on the essential assumption of Neo-Classic that technology is external and constant among countries. It has been found out different models that eliminate the diminishing return to capital of Neo-Classic Approach. It has been accepted pioneer growth theories of Romer (1986) and Lucas (1988) models assuming that technology is internal. These models have given more convincing information about the reasons of development differences among the countries than Neo-Classic Growth Models have. If they have been compared to each others, new endogenous growth theories have suggested that differences between developed and developing countries can not be eliminated, even can be increased, if the countries have not invested in human capital and technology.According to the new growth theories, technological development, tangible and human capital investment leading to long run sustainable growth rates can be produced R&D investment and learning-by-doing. R&D based models such as Romer (1990), Grossman-Helpman (1991) and Aghion-Howitt (1992) have included incomplete competition in growth models. These models contain three sectors consisting of final output sector, intermediate good sector and R&D sector. R&D sector produces new design by using human capital. These designs have been sold to intermediate good sector. Patenting the new design, intermediate good sector is the monopole producer of the new products and intermediate goods. After that, intermediate good sector sells qualified and diversified products to the product sector. R&D sector is the key sector in these models.In this study, representing R&D sector we used gross expenditure on R&D , the number of researchers employed in R&D sector, and the number of patents. The affects of R&D activities on growth and foreign trade are examined by using panel data techniques in point of OECD countries. It?s found out that explanatory variables have significant and positive effect on GDP and export.