How Does R&D Expenditure Affect Employment and Growth? Understanding the Impact of Sectoral R&D Expenditures: The Case of Turkey

Hakan Sara㇠and Ebuzer Arslan

Fiscaoeconomia, 2024, issue 2

Abstract: R&D, which is an indicator of technological developments, is an important factor in the production process. R&D expenditures may lead to changes in the employment structure of the relevant sectors by affecting production factors. In this study, in order to determine the effect of R&D expenditures on employment and growth, R&D expenditure amounts, production income, and number of employments for thirteen different sectors, which their data were obtained from the NACE Rev2 classification system using TURKSTAT data for the period 2013-2022, were analyzed by creating a panel data set with these data. As a result of the analysis, it was found that there is a long-run relationship between R&D expenditures and growth. In the model, the long-run parameters are determined as 0.128 for R&D and -1.468 for the constant coefficient, and both variables are significant. Therefore, R&D expenditures affect the growth variable in the long run. A 1% increase in R&D expenditure increases production by approximately 13%. In addition, it can be said that when sectoral R&D expenditures increase, the Manufacturing, Electricity, Education, and Arts and Entertainment Services sectors are positively affected and increase the amount of production, while it decreases the amount of production in the Professional Scientific and Technical Services sector. There is no long-run relationship between R&D expenditures and employment, but when the sectors are evaluated separately, it is found that R&D expenditures have a positive effect on employment in Mining, Manufacturing, Electricity, Information Communication, and Arts and Entertainment Services, while they have a negative effect on employment in Construction and Wholesale-Retail Trade sectors.

Keywords: Production; Employment; R&D; Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: C23 I20 J20 L60 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:fis:journl:240218

DOI: 10.25295/fsecon.1432766

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