ANALYSIS OF THE RELATIONSHIP BETWEEN R&D EXPENDITURE AND ECONOMIC GROWTH: A CASE OF BRIMC COUNTRIES

Abstract

In the global competitive environment, where international borders have been abolished and multilateral liberalization process and economic cycles are experienced, also a number of changes have occurred in determinants of growth. Research and development activity (R&D) as an impulsive force of economic growth has a leading role in the economic structures of countries. R&D sector contributes to the economic growth by creating externality via increasing returns in endogenous growth models. This study aims to test if the predictions of the R&D models are valid for BRIMC countries by using the annual data for the period 2005-2014. The results of whole panel data indicate that R&D expenditures affects economic growth positively.