Open Access Article SciPap-839
Public Expenditure on Research and Development and Its Relationship With Economic Growth in the Czechia, Denmark and Slovakia
by Irena Szarowská 1,* and Dominika Žůrková 2

1 School of Business Administration in Karvina, Department of Finance and Accounting, Silesian University in Opava, Univerzitní náměstí 1934/3, Karviná 733 40, Czechia

2 School of Business Administration in Karvina, Department of Finance and Accounting, Silesian University in Opava, Univerzitní náměstí 1934/3, Karviná 733 40, Czechia

* Authors to whom correspondence should be addressed.

Abstract: This article deals with a public support of reseach and development (R&D), as R&D is of a crucial importance in creation of knowledge, products and technologies. Literature offers support for varied relationship between R&D expenditure and economic growth – positive, negative and zero. Therefore, the goal of the article is to verify the relationship between public R&D expenditures and economic growth in the Czechia, Denmark and Slovakia in the period 1995–2013. Empirical evidence is based on data collected from Eurostat database. Johansen cointegration test is applied for analysing the long-term relationship and the Error correction model is added for short-term dynamics. Results of estimations confirmed the positive long-term relationship between Gross Domestic Expenditure on R&D (GERD) and economic growth in Denmark and Slovakia. Anyway, testing public R&D expenditure by sectors of providing verified cointegration for one sector in all countries at least. Concretely, the long-term relationship was proven for all sectors in Denmark, for government, private non-profit and higher education sectors in Slovakia and for government sector in the Czechia.

Keywords: Economic Growth, Research And Development, Cointegration, Long-Term Relationship, Public Support

JEL classification:   F63 - Economic Development,   H25 - Business Taxes and Subsidies,   O38 - Government Policy

SciPap 2017, 25(1), 839

Received: 1 September 2016 / Accepted: 20 March 2017 / Published: 12 April 2017