Research & development and growth: A Bayesian model averaging analysis

Roman Horvath

Economic Modelling, 2011, vol. 28, issue 6, 2669-2673

Abstract: We examine the effect of research and development (R&D) on long-term economic growth using the Bayesian model averaging (BMA) to deal rigorously with model uncertainty. Previous empirical studies, which applied BMA, investigated the effect of dozens of regressors on long-term growth, but they did not examine the effect of R&D due to data unavailability. We extend these studies by proposing to capture the investment in R&D by the number of Nobel prizes in science. Using our indicator, the estimates show that R&D exerts a positive effect on long-term growth. This result is robust to many different parameter and model prior structures as well as to alternative definitions of R&D indicator.

Keywords: Research and development; Growth; Bayesian model averaging (search for similar items in EconPapers)
JEL-codes: O10 O30 O32 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2669-2673

DOI: 10.1016/j.econmod.2011.08.007

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