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The Effect of Public and Higher Education R&D Performance on Private Sector R&D Expenditures: The Case of Selected OECD Countries

Mustafa Gömleksiz

  •  Year : 2024
  •  Vol : 2
  •  Issue : 2
  •  Page : 96-113
In modern economies, innovations play a crucial role in driving the production of high value-added goods and services within firms, serving as a cornerstone for sustainable growth and development. In this context, the financing of R&D activities that generate innovations is vital for technological progress and competitiveness. This study analyzes the long-run impact of R&D performance of public and higher education sectors on private sector R&D expenditures. The findings of the panel data set covering the period between 1997-2021 indicate that public R&D expenditures do not have a significant effect on private sector R&D activities, while publicly financed R&D significantly increases private sector R&D expenditures. Accordingly, it can be stated that public R&D serves as a leverage function within the scope of firms' own R&D activities. This function can be attributed to the reduction of financing barriers and R&D costs in strategic sectors, as well as grants, subsidies and tax practices that encourage more R&D. Second, it is concluded that higher education R&D expenditures have a complementary effect on private sector R&D expenditures. This effect can be argued to emerge especially through knowledge spillovers, specialized labor force and cooperation channels. Thirdly, country-level differences in the quality of human capital appear to limit the contribution of the human factor in R&D activities. In this context, knowledge and skill deficiencies mostly due to inadequacies in the education system, imbalance in the sectoral distribution of skilled workers and high costs of skilled labor can lead to cross-country inequalities in the role of human capital in R&D activities. Finally, economic development plays a critical role in private sector R&D. This result points to the importance of laws, regulations and supports based on strong institutional structures, advances in research infrastructure, diversified market demand and global cooperation and financing networks in parallel with economic development.
Cite this Article As : Gömleksiz, M. (2024). Kamu ve yükseköğretim Ar-Ge performansının özel sektör Ar-Ge harcamalarına etkisi: Seçilmiş OECD ülkeleri örneği. Sustainable Welfare, 2(2), 96-113.

Conflict of interest : The authors declare that they have no conflict of interest.

This article is published under the CC BY-NC 4.0 license.
Sustainable Welfare
2024, Vol2, Issue2
ISSN: 3023-6673
Received : , Accepted : , Published Online :

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