Frontier Technologies and Economic Development in New EU Member Countries: An Application of the JKS Panel Causality Test

Economic development is a broad concept that incorporates social, political, and economic dimensions. Countries prioritize economic growth as a main tool that led to an increase in welfare to achieve economic development. From this perspective, the use of technology, which has been a common practice in growth models for many years, emerges as one of the most significant driving forces behind economic growth. However, it is not just the utilization of technology that matters; physical investments aimed at technology advancement, human capital that enables the use of technology, and national efforts towards the adaptation and integration of technology also serve as catalysts for economic growth. Consequently, a relationship between economic growth and ‘frontiers technology,’ which includes all these factors related to technology usage, becomes apparent. In this context, this study aims to analyze the relationship between frontier technology and economic development by deploying panel causality analysis for new EU member countries over the period 2008–2021. The empirical results reveal that frontier technologies granger cause economic development in new EU countries. That is to say, changes in frontier technologies explain changes in economic development in new EU countries. This result demonstrates that frontier technologies have significant impacts on economic development, making them crucial tools for new EU member countries in terms of their EU cohesion processes and economic developments. When designing policies, new EU members should consider the importance of these tools. This approach not only facilitates the integration and convergence processes within the EU but also supports these countries in leveraging the potential of frontier technologies to accelerate their economic development.