The Relationship Between Research & Development Expenditures and Economic Growth: The Case of Turkey

Abstract

This article sifts through the correlation between Research and Development (R&D) expenditures, and economic growth at the national level in Turkey. All the while, not only theoretical, but also empirical literature has drastically insisted on that the item of investments in R&D is an indispensable component of economic growth. The relationship between R&D expenditures and economic performance has attracted a great deal of attention in the academic field for quite some time. In addition to that, the subject has been long emphasised by governments and private enterprises. Most of the contemporary economists have attributed the sustained growth in developed nations to their intensive R&D activities. As a developing country, Turkey is the 17th largest economy, according to the World Bank's GDP ranking. In the light of Turkey's 2023 Goals, the country aims to be ranked among the top ten economies of world. Thereby, the discussion of the relationship between economic growth and R&D expenditures has an exceptional urgency for Turkey's ambitious economic targets. In this study, the relationship between R&D expenditures and economic growth was circumstantially scrutinized in Turkey for the period of 1990 to 2013. To that end, unit root tests, co-integration test and, the Granger's causality test were used. As a result of the analysis, it is found that the series inspected are stationary in first-order and have no co-integration relationship between them. According to the Granger's causality analysis applied, it is also uncovered that there is no causality relationship between the series examined.