THE IMPACT OF RESEARCH AND DEVELOPMENT EXPENDITURES ON INNOVATION PERFORMANCE AND ECONOMIC GROWTH OF THE COUNTRY—THE EMPIRICAL EVIDENCE
AbstractThe main aim of this article is to empirically verify the relationship between research and development (R&D) expenditures, innovation, and economic growth. Based on the correlation analysis, we examine the interdependencies between selected indicators. We have found that countries with an increase in innovation performance over the past years mostly experienced a higher economic growth in the year 2012. Countries with higher research and development expenditures have not only more researchers, but as well more patents registration. Subsequently, the relationship between R&D expenditures and economic growth is examined based on econometric regression model of the panel data. Input data used in the regression covers EU countries between the years 1999 and 2011. Our results suggest the existence of positive effect of lagged R&D expenditures on economic growth in these countries. We have also identified positive impact of the flow of foreign direct investment (FDI) in this model, which could be related to mechanism of technology diffusion across the countries.
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