The relationship between business R&D expenditures and financial development: Panel data analysis for OECD countries

Countries are giving importance to research and development (R&D) activities to produce and develop new products or technologies. For this reason, it is noticed that R&D expenditures have increased in recent years in countries that want to gain a competitive advantage. Also, financial development in countries increases the level of development and supports R&D activities. This thesis aims to investigate the relationship between business R&D expenditures and financial development. 15 OECD member countries are analyzed with the Dumitrescu-Hurlin Panel Granger Causality Test based on panel data analysis using data between 2009 and 2019. Also, it was analyzed using the data from total business enterprises, agriculture, forestry and fishing, manufacturing, and total services sectors. The results of the analysis indicate that there is a positive relationship.