Are Countries’ R&D Expenditures Effective on Financial Development and Economic Growth?: An Application on Some Countries in the Developing Economies Class in Europe
Are Countries’ R&D Expenditures Effective on Financial Development and Economic Growth?: An Application on Some Countries in the Developing Economies Class in Europe

Author(s): Nazan Güngör Karyağdi, Ahmet Şit, Yunus Yılmaz
Subject(s): Developing nations, Economic development, Financial Markets
Published by: Özgür Yayın Dağıtım Ltd. Şti.
Keywords: Europe; Economic Growth; Financial Development; Developing Economies;
Summary/Abstract: The aim of this study is to investigate the relationship between countries' R&D expenditures and financial development and economic growth. For this purpose, annual data for the period 2003-2020 of 7 countries in the Developing Economies Class in Europe were used. As dependent variables, stock market indices and growth rates, which represent the highest share in countries representing financial development, and the share of countries' R&D expenditures in GDP are used as independent variables. As a method, Westerlund cointegration test, AMG and MGE coefficient estimators were used. As a result of the cointegration test, it is seen that there is a cointegrated relationship between the variables in the long run. As a result of coefficient estimators, positive impact of R&D expenditures on financial development in Hungary, Turkey, Romania and Ukraine; It is seen that it has a negative effect in Russia, Bulgaria and Poland. In addition, it was concluded that R&D expenditures had a positive effect on growth in Bulgaria, Poland, Turkey and Hungary.

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