Investment in R&D. Is It Enough to Increase Economic Growth? An Analysis through Dynamic Panel Data

Abstract

This study examines the economic effects of expenses in research and technological development (R&D), both considered totally and differentiated by the nature of the financing among business, state, and higher education sectors. A panel of cross-sectio-nal data and time series was obtained, during the period 1980-2021, for a sample of 22 countries grouped according to income level, in advanced, emerging and developing economies. In order to provide a dynamic characterization in the short and long term, the autoregressive model of distributed lags approach is used, which uses the Pooled Mean Group estimator developed by Pesaran, Shin and Smith (1999). The results reveal a differentiation in the contribution of research activities to development; thus, the R&D expenditure carried out by companies and universities contributes significantly to economic growth in advanced economies; emerging economies have generated a positive association between scientific research and economic growth through the formal publications of their studies, while developing economies still do not show significant positive impact between R&D and its economic growth, despite the fact that conditional convergence is confirmed as predicted by the empirical growth literature.