The relationship between R&D and high-technology exports within innovation indicators: Panel data analysis

Abstract

Industry 4.0 and technological innovation are an important threshold for developing countries that need to achieve a certain growth rate. Especially caught up in the upper-middle income group and middle-income trap located in terms of access to developing countries to sustainable economic growth target is also extremely important. Increase in the share of high value-added products in country’s exports will increase contribution to GDP. In addition, an increase in productivity level will be achieved and healthy growth will be achieved. In this study, the relationship between R&D (Research-Development Expenditure/GNP) and HTE (High Technology Exports/Total Manufacturing Industry) variables between the years 1996 and 2017 of the countries in the top ten in the Global Innovation Index 2018 ranking - investigated by panel-data analysis. According to the panel cointegration tests, HTE and RD variables move together in the long term. According to the causality analysis, there is a bidirectional relationship between the variables. According to the Hausman test results, the random effects model was selected and the 1 % change in the RD variable was determined to cause the same direction change in the HTE variable of 6.87 %. © Peter Lang GmbH.