Original scientific paper
https://doi.org/10.15179/ces.22.2.1
Patterns of Interrelationships between Inflation, R&D, Innovation, and Economic Growth: Evidence from Central and Eastern European Countries
Ljubivoje Radonjić
; Faculty of Economics, University of Kragujevac, Kragujevac, Serbia
Nevena Veselinović
; Institute of Information Technologies, University of Kragujevac, Kragujevac, Serbia
Abstract
The primary objective of the article is to examine the nexus between inflation, R&D, patents, and economic growth within a group of Central and Eastern European countries (CEECs). The examination is conducted in two parts. First, the impact of total R&D expenditures on economic growth is observed, as well as the influence of growth on private and public R&D investments. Second, the conversion from private and public R&D investment to innovation, measured by the number of patents, is observed. Throughout the analysis, economic growth and inflation are representative of macroeconomic stability. The outcomes of the panel auto-regressive distributed lag estimation indicate that total R&D expenditures are essential and positively significant for economic growth in the observed countries. The results also show that output growth has a remarkably positive impact on generating private R&D expenditures. Such an influence is also found, but at a weaker level, in the case of public R&D expenditures. In this part of the analysis, inflation has demonstrated a harmful influence on R&D expenditures. The results of the second part indicate that public and private R&D expenditures, at a significant level, generate innovation activities, while the impact of inflation has proven to be unimportant.
Keywords
innovation; economic growth; inflation; panel ARDL
Hrčak ID:
248386
URI
Publication date:
22.12.2020.
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