The effect of R&D expenditures and defense expenditures on economic growth: An empirical study on G-20 countries

R&D expenditures and defense expenditures are required for countries to develop and ensure security. While R&D expenditures are generally made by the company, defense expenditures are made by the state with the national income of the countries. Defense expenditures and R&D expenditures have an important share in the country's economy. Although defense expenditures vary according to the threat perceived by a country, it is an indispensable service that has been shaped according to the possibilities of the countries from the first communities to the present day. R&D expenditures, on the other hand, have to be compulsory expenditures in order for companies and sectors to continue their existence under increasing competitive conditions and to reduce their foreign dependency with the entry of the innovation age. In this study, the relationship between defense expenditures and R&D expenditures and economic growth is empirically examined. Panel data regression analysis was used to examine this relationship. While 19 countries from the G-20 countries between 2000-2021 were used for the relationship between defense expenditures and economic growth, 13 countries were used among the G-20 countries between 2000 and 2020 for the relationship between R&D expenditures and economic growth. In the model established for the total patent, 12 countries from the G-20 countries were used between the years 2000-2020. Within the scope of the G-20 countries, the results were obtained by distinguishing the developed and developing countries. In line with the results obtained, the effect of defense expenditures and R&D expenditures on economic growth was found to be a positive relationship. According to the result, increases in defense expenditures and R&D expenditures increase economic growth. The most affected country groups resulted as developing countries. Keywords: Defense Expenditures, R&D Expenditures, Economic Growth, Panel Data Regression Analysis.