THE EFFECT OF R & D SPENDING ON THE MIDDLE INCOME TRAP: PANEL DATA ANALYSIS

Abstract

Middle-income trap expresses that the middle income group of countries have not reached high income group due to inability creating sufficient infrastructure development process in literature. Technological infrastructure-based R & D is increasing in order to get high income group for countries. Aim of study is an assessment of the role R & D on MIT for European Union and Turkey. In this paper effect of R & D on MIT was investigated for EU-28 and Turkey. Relationship among per capita income, R & D and savings were analyzed by using Westerlund Bootstrap Westerlund Durbin-Hausman cointegration and Hacker ve Hatemi-J bootstrap causality in panel data analysis. Among variables was found long-term relationship result of study. There is unidirectional causality was found from per capita income to R & D. But no causality effect was found from R & D to per capita income, and between other variables as well.