Productivity and Economic Growth in the European Union: Impact of Investment in Research and Development

Andreja Nekrep, Sebastjan Strašek, Darja Boršič


This paper focuses on investment in research and development as a factor of
labour productivity and economic growth. Our analysis confirms the link between
expenditure for research and development (expressed in % of GDP) and labour
productivity (expressed in the number of hours worked) based on selected data
for EU Member States in the period 1995-2013. A causal link between variables
of the concave parabola was confirmed, and the value of expenditure for research
and development (2.85% of EU GDP) maximising productivity (per hour of work)
was determined based on the examined data. In accordance with these findings,
EU’s target of reaching 3% of GDP spent on research and development to be
achieved by 2020 seems in support of reaching maximum productivity in the EU.


investment in research and development, productivity, economic growth, correlation, panel analysis

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