Impacts of R & D expenditures on high technology product exports in BRICST countries

Abstract

One of the best solutions for countries with foreign trade deficit and cannot increase total exports is to improve the added value of exported products. High technology products have the highest added value. The method to increase production and exports in high technology products is to increase R & D expenditures and qualified labor force available for the R & D sector. South Korea, for example, is one of the countries that significantly accelerate economic growth thanks to technology-intensive exports. South Korea, has recognized the importance of advanced technology-driven growth in its export-oriented economic growth strategy. South Korea has succeeded in transforming the composition of the manufacturing industry significantly over the years and transforming it from labor-intensive industry to capital-intensive and high-tech industries (Arslanhan and Ve Kurtsal, 2010). Again, China initially started with cheap and low quality products exports based on cheap labor. However, when China came to 2012, there were 170 automobile brands producing and exporting. There were advances towards the defense and space industry. In the same years, China has begun to take its place in the pharmaceutical industry with its advanced technology and mass production capacity (Ozsoylu and Algan, 2011; World Bank, 2012). On the other hand, India has significantly accelerated its economic growth through computer software, natural healthy life support products and remote call center services it offers to developed countries thanks to the individuals it sent for education abroad in the 1960s (Hindistan, 2012). Members of BRICST countries, Brazil, Russia, India, China, South Africa and Turkey drew global attention due to their economic growth performance in recent years. Economic performance of these countries affects the foreign trade volume and economic growth for the rest of the world. In the present study, impacts of R & D expenditures and the size of the qualified R & D labor force on high technology exports were investigated for BRICTS countries using panel data analysis for 1996-2014 period. We expected that the study findings would reveal a positive impact of R & D expenditures and qualified labor force in the R & D sector on exports in high technology products. The present study would contribute to the literature as it would draw the attention of developing countries to the significance of R & D expenditures and qualified labor force in the R & D sector