Innovation for Economic Growth: G7 vs E7

Abstract

Purpose: The main objective of this research is to examine the impact of R&D expenditures and Global Innovation Index ranking on per capita income in E7 and G7 country groups. Methodology: Logistic regression model was used as the research method in the study. Stata 18 Data Analysis and Statistical Software Program was used in the analysis of the data. At the hand of Stata 18 Data Analysis and Statistical Software Program, regression analysis was used to estimate the possible and unknown effects of independent variables on the dependent variable. During the collection of the data used in the study, the archive scanning method, which is one of the qualitative research methods, was used. Archival reports and official records were also used in the study. Findings: According to the research results, 83.56% of the model is explained by explanatory variables. With all other explanatory variables constant, a 1% increase in R&D expenditure will result in an increase of 0.5243% on GDP per capita. At the same time, this coefficient gives the flexibility of GDP per capita relative to R&D expenditure (%GDP). It is also found out that there is a positive relationship between GDP per capita and R&D expenditure and also, there is a negative relationship between GDP per capita-GII ranking. In this study, which deals with the innovation efficiency of the G7 countries and the E7 countries, and the effect of this performance on the GDP per capita, it is seen that the G7 countries spend more on innovation. Originality: It contributes to the literature as there is no other study in the literature that deals with per capita income, Global Innovation Index ranking and R&D expenditures comparatively between the G7 and E7.