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Does research and development expenditure impact innovation? Evidence from the European Union countries

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  • Pegkas, Panagiotis
  • Staikouras, Christos
  • Tsamadias, Constantinos

Abstract

This study empirically investigates the relationship between innovation and Research & Development expenditure in European Union countries over the period 1995–2014. The findings of the empirical analysis show that there is a co-integration relationship between innovation and R&D. The results also reveal the existence of a positive and significant effect of business, public and higher education R&D on innovation. Business R&D is the sector with the highest positive effect on innovation. The results indicate that EU should strengthen the cooperation between business, public and higher education R&D through the encouragement of partnerships between the private sector, R&D and innovation system.

Suggested Citation

  • Pegkas, Panagiotis & Staikouras, Christos & Tsamadias, Constantinos, 2019. "Does research and development expenditure impact innovation? Evidence from the European Union countries," Journal of Policy Modeling, Elsevier, vol. 41(5), pages 1005-1025.
    • Handle: RePEc:eee:jpolmo:v:41:y:2019:i:5:p:1005-1025
    DOI: 10.1016/j.jpolmod.2019.07.001
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    More about this item

    Keywords

    R&D; Innovation; Public policy; European Union; Panel data;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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