The effects of defense expenditures and R&D expenditures on economic growth: Panel data analysis

The defence economy is still of great importance to the countries worldwide even though the wars came to an end. The fact that defence expenditures hold a huge share in public expenditures which, in a way, effect theeconomic growth, paves its way to the recent studies reinforcing the link between defence expenditures and the economic growth. Similary, R&D expendituresare of great importance in defence and economy realms. In today's World, where information technology is highly crucial, innovative developments take place with the help of R&D, which caused reinvestigation of the tie between R&D exp. and economic growth many times. OECD countries, which consist of developed and also developing ones, create new products to sell all around the World by using high technology. Furthermore, they aim to benefit from these sales to give aid to defence economy. When looked through the recent studies, we come deeply with the fact that there is no current study having been done so far concerning the effect of R&D exp. and defence exp. on economical growth. As to the goal of this study, it is to examine the effects of R&D exp. and defence exp. on economic growth and to find out if there is an efficient link between these two. According to one recent analysis, it comes forth that there is a double-sided effect between R&D exp. and defence exp. an done way relationship between economic growth and defence exp. in addition, no link between R&D exp. and defence exp. has been defected. Under the light of this, it has been proved that the steps taken further in R&D mutually affect the ones in economy yet the investments made in defence exp. Do not bring a link into existence for the investments in R&D.