The Impact of R&D and Education Expenditures on Economic Growth: The Case of Developed Countries

Abstract

The aim of this study is to analyze the impact of R&D and education expenditures on economic growth for 10 developed countries between 2000-2021 using panel data method. According to the results of the analysis, R&D and education expenditures have a statistically significant positive effect on economic growth. The effect of education expenditures on growth is stronger than that of R&D expenditures. The findings support the theoretical framework in the literature and show that R&D and education are two important components for long-term sustainable growth. The results reveal that R&D expenditures increase productivity by encouraging innovative production processes, while education contributes to a knowledge-based economy by strengthening human capital. This positive effect of both R&D and education on economic growth indicates that industry, technology and university cooperation should be strengthened. In order to achieve this and to develop a holistic and sustainable growth strategy, governments should allocate more budget to R&D and education expenditures, prioritize initiatives to promote innovation, and support the production of high value-added products in order to increase international competitiveness.