Research and Development: Source of Economic Growth

The objective of this research is to empirically examine the relationship between innovation and economic growth in Turkey by using endogenous economic growth theory. Recent developments in theory support the view that the key driver for economic growth in global economies is innovation. According to this conceptual framework, a model is developed to examine the relation between researchers employed in R&D departments, R&D expenditures, patents as innovation indicators, and Gross Domestic Product (GDP) as economic growth. A panel regression model is used to investigate these relations for chemical firms listed on the Istanbul Stock Exchange (ISE) between 1998 and 2010. The data for this study has been obtained from the Turkish Statistical Institute and the Turkish Patent Institute. The results of analysis indicated a positive and significant relation between R&D expenditure and the number of R&D employees in influencing economic growth.