The relationship between R&D expenditures and economic growth: The case of OECD

The determinants of economic growth have attracted the attention of researchers since the classical economists and a large literature has emerged to explain the determinants. The neoclassical growth approach accepted the growth in labor productivity as equal to the rate of technological development. However, in this approach, technological development has been accepted as an external determinant. The literature consisting of endogenous growth theories has added that technological development is a concept that is affected by the policies of policy makers. In today's world, technological developments play an active role in ensuring economic growth, which is one of the most important determinants of the welfare level of countries. Since one of the factors that create technological development is research and development (R&D) activities, R&D expenditures play an important role in ensuring economic growth. In this context, the aim of the study is to determine the effect of R&D expenditures, the number of researchers and patent applications in the R&D sector on economic growth by panel data analysis using the 1996-2020 period data for OECD countries. Findings from panel regression estimates revealed that R&D expenditures, the number of researchers in the R&D sector and the number of patent applications positively affect GDP. As a result, this study recommends the implementation of policies to encourage the R&D sector to accelerate economic growth and raise living standards to OECD countries.