The Impact of Institutional Features on R&D in Business Enterprise Sector and Sustainable Growth

Milutin Ješić and Miomir Jakšić ()
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Miomir Jakšić: Faculty of Economics, University of Belgrade, Serbia

Journal of Central Banking Theory and Practice, 2020, vol. 9, issue 3, 61-76

Abstract: The main goal of our study is to theoretically and empirically contribute to the analysis of relation between institutional features and R&D in business enterprise sector and consequently on sustainable economic growth. We exploited the available measures of institutional quality from World Government Indicators of World Bank and data on R&D in business enterprise sector. We employed First-Differencing GMM method to estimate the model on the balanced panel data including the following European countries: Bulgaria, Croatia, the Czech Republic, Hungary, Poland, Romania, Serbia and the Slovak Republic, for the time span of 2007-2017. The institutional features are statistically significant factor of R&D in business enterprise sector. We found that Government effectiveness and Control of corruption in particular are very important in supporting the R&D. These measures of institutional quality are key institutional determinants of R&D in business enterprise sector. R&D in business enterprise sector is one of the crucial parts of the overall R&D, and therefore policymakers have to develop favourable conditions for those activities in private firms. Institutional features should be an important variable in explanation of R&D intensity. The presented analysis empirically contributes to the body of knowledge on determinants of R&D for European countries that have to develop their institutions further in order to grow sustainably. This study is using contemporary methods for testing the underlying problem.

Keywords: R&D in business enterprise sector; institutions; sustainable growth; government effectiveness; control of corruption (search for similar items in EconPapers)
JEL-codes: O31 O38 O43 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:9:y:2020:i:3:p:61-76

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