Nexus between Economic Growth and Research and Development (R&D): Empirical Evidence from SAARC

Abstract

The concept of economic growth is the augmentation of an economy's capacity to manufacture goods and services compared between different periods. (Manuela Raisová, & Júlia Ďurčová, 2014). The discourse surrounding economic growth and the augmentation of national income gained prominence, particularly following the publication of "Wealth of Nations" in 1776. The assessment of economic growth is often measured through an increase in real gross domestic product (GDP) (Odit, Baboo M Nowbutsing & M. P., 2009). Research and development encompass a broad category of activities that include applied and basic research as well as development enterprises. Broadly speaking it refers to systematic efforts that are aimed at both expanding knowledge and applying it to create new products, services, or processes. Presently innovation activities are closely intertwined with research and development. In the broader sense, R and D involve everything from fundamental research to the marketing and successful launch of a new product or process. This is referred to as Research and Development Innovation (R and D and I). (Kainulainen, n.d.) Research and Development is essential for technological advancement and the generation of new knowledge. Investing in research is highly profitable in the sense that the returns of this endeavor greatly surpass the costs. A strong relationship between economic growth and technological investment was discovered in the OECD (Organisation for Economic Co-operation and Development) member countries. (Onsay, 2021) Researchers have utilized diverse approaches to gauge the impact of R&D expenditure on economic growth, productivity, and output growth. This has resulted in the derivation of both social and private rates of return to R&D spending. The predominant method involves the application of econometric techniques to estimate modified exogenous growth models. The enhancement of research and development (R&D) along with the development of information is recognized as a crucial driver for ensuring sustained economic growth