Title: Innovation and output in OECD countries: implications upon emerging economies

Authors: Zoltan Bakucs, Imre Ferto

Addresses: Institute of Economics, Hungarian Academy of Science, 1112 Budapest, Budaorsi ut 45, Hungary. ' Institute of Economics, Hungarian Academy of Science, 1112 Budapest, Budaorsi ut 45, Hungary; Department of Agricultural Economics and Rural Development, Corvinus University of Budapest, 1093 Budapest, Fovam ter 8, Hungary

Abstract: The paper analyses the long run relationship between research and development expenditure and GDP in the OECD and emerging countries between 1991 and 2000 using panel cointegration methods. Our results suggest the long-run causality running from research and development investment towards GDP. Estimated elasticities show the increased importance of R&D investment, 1% increase in innovation investments generates on average a 0.58% increase of the output. In addition, we show that unit research and development investment increase generates higher returns in emerging than in developed economies.

Keywords: R&D; research and development expenditure; gross domestic product; GDP; emerging economies; panel cointegration; economic output; OECD; Organisation for Economic Co-operation and Development; emerging countries; long-run causality; estimated elasticities; innovation investments; developed economies; learning.

DOI: 10.1504/IJIL.2011.040537

International Journal of Innovation and Learning, 2011 Vol.9 No.4, pp.388 - 400

Published online: 02 Jun 2011 *

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