The impact of education and R&D investments on economic growth

The main objective of this study is to examine the impact of education expenditures and R&D investments on economic growth in Turkey. The study assumes that education expenditures support economic growth by enhancing the knowledge accumulation of the labor force, while R&D investments encourage the production of new products through innovation. For this purpose, the Autoregressive Distributed Lag (ARDL) method is applied using data covering the period 1996–2023. The findings indicate that education expenditures and the labor force variable increase economic growth in the long run, whereas the R&D variable reduces economic growth. A review of the literature shows that in developed countries there is generally a direct and positive relationship between R&D expenditures and economic growth. In relatively less developed countries, however, the relationship between R&D expenditures and economic growth yields more ambiguous results. This situation suggests that, for developing or underdeveloped countries, the limited emergence of new products as a result of R&D expenditures and the constraints on their commercialization prevent the expected positive impact on economic growth from materializing.