KEY ROLE OF R and D INTENSITY ON POLITICAL AND FINANCIAL STABILITY: EVIDENCE FROM THE G-8 COUNTRIES

• Main Authors: Yavuz Yıldırım, Feyza Balan
• Format: Article
• Language: English
• Published: Social Sciences Research Society 2018-07-01
• Series: International Journal of Economics and Finance Studies
• Online Access: http://www.sobiad.org/eJOURNALS/journal_IJEF/archieves/IJEF_2018_2/y-yildirim.pdf

The concept of globalization has increased the importance of the expenditures on R and D, which are well known as the fundamental source for economic growth of both developing and developed countries. Even though, there have been a great number of studies subjected to the R and D-economic growth relationship, there have rarely been studied on the subject of the relationship among R and D, political stability and financial stability. In this regard, the main scope of this study is to investigate the causal relationships between R and D intensity and political stability and financial stability for G-8 countries during the period 1996-2013. Applying the Dumitrescu-Hurlin panel non-causality test, the empirical findings of this study shows that there exists a causal relationship running from R and D intensity to political stability and financial stability. Moreover, this study shows that R and D intensity has a positive and statistically significant effect on both political and financial stability of the G-8 countries.