Research Expenditures Research Articles

Assessing Regional Economic Performance in Romania Through Panel ARDL and Panel Quantile Regression Models

This study aims to address the persistent regional economic disparities in Romania by evaluating economic performance through Panel Autoregressive Distributed Lag (pARDL) and panel quantile regression (PQR) models. The analysis focuses on the impact of key economic variables, including research and development expenditures (CTCRD), IT infrastructures (IT), the number of universities (FCL), and the average number of employees (NMSP), on regional gross domestic product (GDPR). Using data from the Romanian National Institute of Statistics for the period 2003–2022, this research seeks to understand how targeted investments and policy interventions can stimulate growth and reduce inequalities across regions. The findings highlight the important role of R&D, IT infrastructures, and technological advancements in driving economic growth, especially in less developed areas. The study also emphasizes the importance of region-specific strategies in fostering sustainable growth, promoting economic resilience, and bridging the gap between more and less prosperous regions.

Assessing the internationalization dynamics of emerging markets: a comprehensive analysis utilizing SWARA-WASPAS techniques

Purpose This paper aims to evaluate the internationalization of countries represented in the MSCI Emerging Markets Index. The evaluation considers high-technology product imports, foreign direct investments, research and development expenditures, patent and industrial design applications, exports and gross domestic product (GDP) data, representing production. Design/methodology/approach This paper uses the Step-Wise Weight Assessment Ratio Analysis (SWARA) method to assess and rank the criteria for evaluating emerging markets. Four academics who are authorities in the field of foreign trade were consulted to weigh the criteria. The Weighted Aggregated Sum Product Assessment (WASPAS) method, considered one of the most reliable and robust MCDM techniques, was then used to evaluate and rank the countries. Findings The findings obtained during the research process reveal the internationalization dynamics of these countries based on the indicators they possess. As a result, it is observed which countries achieve higher performance in the internationalization process based on relevant criteria. Originality/value This study is theoretically unique and valuable as it simultaneously offers the potential for development to macro-level international trade theories, such as the technologic deficit hypothesis, and meso-level internationalization theories, such as the Uppsala model. Additionally, integrated multiple criteria decision-making (MCDM) methods, which are not frequently used in cross-country studies, have been used, and the performance of emerging markets has been ranked. The findings obtained from this application distinguish the research from the existing literature by transforming it into a performance ranking rather than focusing on the antecedents or consequences of internationalization and their interactions.

The macroeconomic determinants of trade openness in Latin American countries: A panel data analysis

Background Trade openness shows a positive impact on economic growth, supported by economic theory, and export diversification and economic complexity show a positive dynamic in trade openness in the world; however, a specificity is generated in South American countries. Therefore, the objective of the research is to analyse the macroeconomic determinants of trade openness in Latin American countries. Methods The research approach was quantitative and explanatory using panel data methodology from the databases of the World Bank, Harvard University and the Economic Commission for Latin America and the Caribbean for the period 2000-2020. Results The fixed effects panel data model showed that the variables that had a negative impact on trade openness were GDP, the economic complexity index and the logistic performance index, while the variables that had a positive impact were exports of high-tech products (a proxy for innovation), exports, imports, research and development expenditure and interregional trade in goods. Conclusions Therefore, during the analysis period of 2000-2020 in South America, based on the panel data analysis under fixed effects, a total of 8 countries had a negative impact on trade openness, and only the economies of Chile, French Guiana, and Brazil had a positive impact on trade openness; these economies are characterized by their better performance in the economic complexity index, their higher percentage of budget for research and development expenses, and their trade policies oriented towards the industrialization of their value-added products.

Factors Affecting the Sustainability of Corporates in Polluting Sectors

Corporate sustainability performance is gaining ever greater importance. The negative impact of climate change is manifested through heavy air, water and soil pollution. Polluting sectors, as the major players, are characterized by large amounts of emissions, waste and consumption of resources, and therefore have a larger negative impact on the environment. Companies operating in polluting sectors are recognized globally as the main sources of greenhouse gas emissions; thus, their performance is widely debated. Despite their character, such companies strive for higher profitability, better financial performance and operational efficiency. However, higher financial resources create the potential for innovation investments in companies. It is widely accepted that research and experimental development (R&D) expenditures enable new business ideas, models, products, services, and processes. However, while pursuing sustainability targets, financial results could be directed towards sustainability performance. The purpose of this paper is to analyze how the financial and innovation results of companies in polluting sectors interact with sustainability performance scores. For it, we have identified three essential pillars of sustainability: environmental, governance, and social. Using ordinary least squares (OLS) regressions, models were developed for each pillar of sustainability, including corporate financial performance indicators and R&D expenditures. The obtained results provide the insights that a company operating in polluting sector size and turnover significantly interacts with all pillars of sustainability. However, we also found that the corporate debt ratio, earnings ratio, and current liquidity have a significant relation only with environmental and social sustainability indicators.

Can “ Zero waste city” policy promote green technology? Evidence from econometrics and machine learning

The promotion of green technology innovation (GTI) is regarded as an effective way to protect the environment and achieve sustainable development. The “Zero waste city” construction pilot policy (ZWCP), is an important policy for the promotion of waste management, and the achievement of sustainable development and circular economy. The paper explores the effect of ZWCP on GTI using the difference-in-differences model and machine learning. The result shows that ZWCP significantly promotes GTI. In addition, causal forest modeling, a type of machine learning method, similarly validates this result. The mechanism effect suggests that ZWCP promotes GTI by increasing research expenditure and enhancing informational development. The heterogeneity effect suggests that ZWCP is more powerful in promoting GTI when it is implemented in western, low administrative level, and resource-based cities. The paper provides a reference for waste management policies and development of GTI in other countries.

ENTROPY BASED EVALUATION OF THE IMPACT OF EDUCATION ON ECONOMIC DEVELOPMENT

In contemporary economic landscapes, effective managerial decision-making requires serious justifications often facilitated by information technologies. The article proposes the application of the foundational principles from information theory and entropy to determine the correlation between education and economic development. This research employs entropy methodology to explore the correlations and implications of these multifaceted domains, drawing insights from a range of global indices. By analyzing data from indices such as the Human Development Index, we investigate the relationship between average years of education and entropy values, shedding light on the diversity and standardization of human capital systems across nations. Moreover, economic indexes, encapsulating factors such as economic freedom and innovation, provide critical insights into the vibrancy and resilience of national economies. Through the lens of the Global Innovation Index, we explore how countries with higher levels of economic freedom and innovation efficiency exhibit less diversity in economic approaches and innovation strategies, leading to a reduction in entropy values. By examining entropy values in conjunction with innovation indicators, such as research and development expenditure and patent applications, we uncover patterns and trends indicative of the diversity or standardization of innovation strategies across countries. Additionally, cybersecurity emerges as a critical dimension of national security and resilience, with implications for economic well-being and societal trust. Through the National Cybersecurity Index, we assess the level of diversity and uncertainty in cybersecurity landscapes, highlighting the importance of robust cybersecurity measures in safeguarding against emerging threats and reducing entropy values. Ultimately, this research contributes to the discourse on sustainable development and resilience in an interconnected world. By identifying specific challenges and opportunities within education, economy, innovation, and cybersecurity domains, it facilitates informed decision-making and strategic interventions to promote inclusive growth and societal well-being on a global scale.

Territorial Patterns of European Innovation in the Context of Different Innovation Output Proxies: A Spatial MGWR-SAR Approach

AbstractThe paper seeks to explore the drivers of European innovation represented by three innovation outputs (patent, trademark, and design applications), emphasizing spatial autocorrelation and heterogeneity. It includes data from 202 regions from 22 European Union (EU) Member States, along with 18 regions from Switzerland, Norway, and Serbia in 2019, providing a more comprehensive geographic scope. By considering multiple indicators of innovation output, including patents, trademarks, and design applications, the main objective is to examine spatial innovation spillovers and the heterogeneous responses of regional innovation output to innovation inputs in the context of European regions. To achieve this goal, the main instrument of the analysis is a newly proposed methodological framework called Mixed Geographically Weighted Regression-Spatial Autoregressive (MGWR-SAR) models. The analysis suggests that while all innovation inputs (most-cited publications, research and development expenditure in the business sector, human resources in science and technology, and population density) are justified in increasing all innovation outputs, the strength of particular determinants of innovation might vary across regions. Moreover, the analysis reveals valuable insights into how spatial spillovers influence regional innovation. The impact of spatial connections varies across the regions, with patents showing the strongest linkages, affecting about 92.27% of regions. Although trademarks and designs have fewer spatial connections (approximately 50% of regions), they still play a significant role in innovation. Although patents have traditionally dominated discussions of innovation, the findings reveal the importance of incorporating designs and trademarks as complementary indicators. Overall, the study highlights the need for multiple metrics to comprehensively evaluate innovations.

R&D expenditure and its macroeconomic effects: A comparative study of Israel and South Caucasus countries

The impact of research and development (R&D) expenditure is crucial for understanding contemporary economic development strategies. This study investigates the relationship between R&D spending as a percentage of GDP and economic growth, focusing on the South Caucasus countries (Azerbaijan, Georgia, and Armenia) and Israel, which is notable for its substantial R&D expenditure (5.71% of GDP in 2020). The objective is to evaluate the impact of R&D expenditure on economic development through the application of rigorous empirical methods. By employing a quantitative approach, this study aims to offer a detailed analysis of the impact of R&D investment on economic growth across various countries. Ordinary least squares (OLS) regression analyzes the association between R&D expenditure and GDP levels. Granger causality tests are utilized to investigate the causal relationships. The results demonstrate a significant positive relationship between R&D expenditure and GDP across all studied countries. Furthermore, the analysis reveals that GDP growth stimulates increased R&D investments in Azerbaijan and Armenia, as evidenced by Granger causality tests. To sum up, this paper underscores the critical role of R&D spending in driving economic development and highlights the necessity for policy initiatives focused on strengthening R&D frameworks.

Business Research and Development: Is there a Substitution Effect of Public Support?

The importance of research and development is reflected in the fact that one of the main priorities of the EU's development policies is increasing spending on research and development in EU member states (EC, 2010). Enterprises do not always have enough internal financial resources to launch their own innovation projects, and therefore they turn to external resource providers (Wang et al., 2016). The paper is aimed at examining the impact of corporate expenditures on R&D from the point of view of their funding sources and analysing the occurrence of the substitution effect of public support for R&D in EU 27 countries. These countries also have the highest level of public financing of research and development, that is, they use the public support of business innovations to the highest extent. The analysis showed that in the EU 27, the substitution effect of public support for research and development is not significant, or rather the complementarity of both types of expenditure prevails at the national level, as public funding of corporate research and development seems to have a positive effect on private research and development and investments. Our analysis is based on available secondary data for 27 EU member states. for a twenty-year observation period (2000-2020). The results have been achieved by using a methodology that includes cluster analysis, panel regression and correlation analysis. We bring new empirical evidence on the relationships between public support and business research and development expenditures. The research results showed the main sources of funding for corporate research and development. It concerns the business enterprises, government and abroad. The cluster analysis determined three clusters, divided according to the structure of the financing of R&D enterprises in EU countries. The results of the cluster analysis were partially in line with the current results of the European Innovation Review. Our findings provide policy implications for the public support policy.

ENSURING ECONOMIC SECURITY: COMPARISON OF EU MEMBER STATES AND UKRAINE

The purpose of this paper is to conduct a comprehensive study of economic security in the EU Member States and Ukraine, to identify differences and to propose targeted policy interventions based on these differences. Methodology. The study uses a quantitative strategy that assigns numerical ratings to countries based on their performance against predefined thresholds for various economic security indicators. These indicators include industrial security, demographic security, energy security, foreign trade security, investment and innovation security, macroeconomic security, food security, social security and financial security. The study uses data from a variety of sources and applies a ranking system to reflect the level of economic security in each category. Results. The analysis revealed significant differences in the levels of economic security between EU Member States and Ukraine. The main findings include differences in agricultural efficiency, healthcare system efficiency, renewable energy consumption, trade balance, research and development expenditure, and socio-economic factors. For example, countries such as Belgium and Ireland have high yields, while Cyprus and Romania have much lower yields. Life expectancy and the quality of healthcare also vary: Spain and Sweden lead the way, while Bulgaria and Ukraine lag behind. Practical implications. The findings suggest the need for targeted policies and technological advances to improve economic security. For the younger generation, marketing strategies based on brand equity and exclusivity can continue even during economic downturns. For the older generation, strategies that focus on value for money or lower prices may be more effective. Understanding these metrics can help businesses align their strategies with national economic priorities and identify potential areas for investment and growth. Value / Оriginality. This study contributes to the existing literature by providing a detailed comparative analysis of economic security in the EU Member States and Ukraine, filling a gap in the understanding of the multifaceted aspects of economic security in these regions.

Design of Epidemic Model For Covid-19 Disease Prediction Using Deep Learning

Promising technologies are available in the developing field of Public Health Surveillance (PHS) to help public health authorities make decisions more quickly by expediting the process of monitoring, analysing, and using unofficial sources. The cornerstone of public health practice is public health surveillance. Influencing policy decisions, spearheading new program initiatives, improving public relations, and helping organisations assess their research expenditures all depend on surveillance data. Public health experts may find that mathematical models are an effective tool in controlling epidemics, which might result in a significant drop in the number of cases and deaths. Moreover, decision-makers can optimise prospective control strategies, including as vaccination campaigns, lockdowns, and containment measures, by using mathematical models to produce long- and short-term forecasts. This work suggests the evolution of epidemics.

Determinants of spatiotemporal changes of land use carbon emissions for counties in Shaanxi Province, China.

In China, urban sprawl and developed land expansion challenge the country's "carbon peak" and "carbon neutrality" goals. Counties as the basic governance units arecrucial for effective carbon reduction policies. This study examines land use carbon emissions (LUCE) in Shaanxi Province at the county level, essential for China's low-carbon strategy. Analyzing data from 107 counties between 2000 and 2020, we found that developed land, though increasing, is the primary carbon source with a slowing growth rate. The Conversion of Cropland to Forests and Grasslands national policy mitigated the impact on carbon absorption. Carbon emissions displayed positive autocorrelation and spatial heterogeneity, varying across the region. Using the Spatial Durbin Error Model, we linked county-level emissions to GDP per capita, population, urbanization rate, and research and development expenditure for direct and indirect influence. These factors correlate with fossil fuel use and high-quality industrial development. Promoting public transits and reducing private car use are vital for achieving local and regional low-carbon goals.

Research, patents, and IPO valuation under the Sarbanes‐Oxley Act of 2002

Research and development (R&D) investments and patents influence initial public offering (IPO) valuations. After Sarbanes‐Oxley (SOX) legislation was enacted in 2002, there was a shift from a display of ‘Effort’ to ‘Results’. SOX legislation made fundamental changes to corporate accounting practices and the process of going public. We investigated how the IPO market responded to SOX legislation. Compliance with SOX was disproportionately costly for small, research‐intensive firms. Using Signaling Theory, we focused on whether the existence of patents became a valuable signal for the effectiveness of research and development expenditures (R&D). Our findings indicated decreased importance of R&D expenditures (signaling ‘effort’ to innovate). We also found increased importance of patents (intermediate ‘results’ of R&D efforts) post‐ relative to pre‐SOX. We concluded that patent activity at least partially replaced and moderated R&D in its role as a value driver of IPOs in the post‐SOX environment.

A Study on the Effect of Research and Development Expenditures on Firm Value and Corporate Performance

A Study on the Effect of Research and Development Expenditures on Firm Value and Corporate Performance

Causal links between patents and economic growth: empirical evidence from OECD countries

Objective of the Study: This paper empirically investigates the reciprocal relationship and causality between patents and economic growth. Methodology/Approach: Utilizing the Generalized Method of Moments (GMM) Panel Vector Autoregression (PVAR) and panel VAR-Granger Causality frameworks, the study concentrates on Organisation for Economic Co-operation and Development (OECD) economies where a high fraction of global innovative activities take place. Originality/Relevance: The relationship and causality between patents and economic growth are investigated and evaluated by distinguishing the former variable into patent applications and grants. Main Results: The findings from the GMM panel VAR approach indicate that patent applications and grants significantly affect economic growth, whereas economic activities do not influence patent-related variables. The estimations from the panel VAR-Granger approach confirm these findings by presenting a unidirectional causality from patent applications and grants to economic growth. The impulse-response functions (IRFs) exhibit parallel findings, and further checks validate the stability of the findings obtained. The outcomes of this study point out two crucial implications. First, the impacts of patent applications and grants affect economic growth similarly while the impact of patent grants lasts longer. Second, while patents cause higher economic activity, the latter does not induce innovative activity through patents in the OECD. Theoretical/Methodological Contributions: It would be useful to conduct separate analyses for a selected product, sector, or country by including research and development (R&D) expenditures for different periods, country groups, and analysis methods. Social/Management Contributions: Countries should prioritize the establishment of an effective patent management system that will increase the pace of innovation and the implementation of incentive policies for the development of high-value-added technology products. JEL Classifications: O34, O40, O50, C23

Green innovation for a sustainable environment: Modeling the new green knowledge production function for OECD countries

AbstractThe world community faces serious challenges such as climate change, biological loss, and environmental degradation. Developing ecological technologies is vital for coping with these unreversible crises. This study proposed a modified green knowledge production function to achieve sustainable development goals and generate policies for promoting environmental technologies. It examined the impact of market demands, environmental research and development expenditures, human capital, and environmental protection policies on the production of green environment technologies. Panel data included 16 OECD countries from 1990 to 2019. Data analysis strategies included the Gengenbach, Urbain, and Westerlund panel co‐integration test, fully modified least squares, mean group dynamic least squares, and estimators such as feasible generalized least squares and panel‐corrected standard errors for robust checks. A novel panel causality test via a half‐panel jackknife estimator was also applied for causality analyses. The findings showed that human capital, market size, and environmental policy stringency played significant roles in producing environmental technologies and innovations. Although environmental expenditures made by the government positively affected the supply of green innovation, no statistically significant results were observed. The study highlights the importance of enhancing environmental innovation factors by promoting policies, including human capital development, environmental sanctions, and market demands for a sustainable environment.

The macroeconomic determinants of trade openness in Latin American countries: A panel data analysis

Background Trade openness shows a positive impact on economic growth, supported by economic theory, and export diversification and economic complexity show a positive dynamic in trade openness in the world; however, a specificity is generated in South American countries. Therefore, the objective of the research is to analyse the macroeconomic determinants of trade openness in Latin American countries. Methods The research approach was quantitative and explanatory using panel data methodology from the databases of the World Bank, Harvard University and the Economic Commission for Latin America and the Caribbean for the period 2000-2020. Results The fixed effects panel data model showed that the variables that had a negative impact on trade openness were GDP, the economic complexity index and the logistic performance index, while the variables that had a positive impact were exports of high-tech products (a proxy for innovation), exports, imports, research and development expenditure and interregional trade in goods. Conclusions Therefore, during the analysis period of 2000-2020 in South America, based on the panel data analysis under fixed effects, a total of 8 countries had a negative impact on trade openness, and only the economies of Chile, French Guiana, and Brazil had a positive impact on trade openness; these economies are characterized by their better performance in the economic complexity index, their higher percentage of budget for research and development expenses, and their trade policies oriented towards the industrialization of their value-added products.

Инновации как фактор экономического роста: регрессионный анализ мировых экономик / Innovation as a Factor of Economic Growth: Regression Analysis of World Economies

This paper investigates the relationship between innovative development and macroeconomic indicator of GDP per capita in different countries. Using a robust regression model, we analyze how investment in innovation, research and development (R&D) expenditures, and other innovation-related factors contribute to economic growth. Our results show a significant positive correlation between the innovation index and GDP per capita, suggesting that countries that prioritize innovation tend to achieve better economic performance. These findings emphasize the importance of fostering innovation to enhance economic prosperity and provide a roadmap for sustainable growth.

Innovation and economic growth: An empirical analysis for African countries

In recent decades, innovation has become recognized as a key driver of economic growth. This study investigated the relationship between innovation and economic growth in 32 African countries from 2006 to 2017. The linear regression panel corrected standard errors (PCSEs) regression estimation was used to analyze the data. PCSE estimation accounted for heteroskedasticity and possible contemporaneous correlation across panels. The findings showed a positive association between the innovation index and economic growth. This result remained true even when research and development (R&D) expenditure (the conventional measure of innovation) was considered for a handful of countries. This finding highlights the significance of innovation in fostering economic growth. The study also found that domestic investment and human capital encouraged economic growth. The study estimated an endogenous growth model with an alternative measure of innovation. Based on the findings, the study recommends that African countries provide financial and material support for R&D in public and private institutions through funding, imparting entrepreneurial research attitudes in academics, and providing an enabling environment for business enterprises.

Fostering innovation through governance systems: empirical insights from South Asian countries

Purpose Innovation is necessary to ensure consistent economic growth and to meet the global competition. In view of this, the purpose of this study to check the effect of governance quality as a tool for fostering innovation performance. Design/methodology/approach The empirical analysis was arranged on 20 year’s (2000–2019) data from South Asian economies. Subject to the existence of cointegration, the authors use the fully modified ordinary least square model for regression analysis and check the robustness through robust least square model. Findings The empirical findings infer that all dimensions of governance have a positive significant impact on both research and development expenditures and trademark applications jointly known as innovation performance. In addition, the empirical analysis discloses the positive effect of all control variables, including FDI inflow, banking sector development, economic growth, ease of doing business index and government subsidies on innovation activities. The analysis confirms the “grease the wheel” role of governance in fostering innovation. Practical implications It is apparently recommended to strengthen the exercise of better governance to harvest better innovation scores. Originality/value This study advocates the positive role of individual dimensions of governance recommended by existing literature and complements the literature by jointly exploring the impact of all governance dimensions on overall innovation performance.