Macroeconomic factors, R&D expenditure and research productivity in economics and finance

Abstract

PurposeDrawing on institutional theory and knowledge spillover, the study aims to examine whether there is a causality relationship between macroeconomic factors and research productivity.Design/methodology/approachThe study uses fixed-effects (FE) panel regression analysis, utilizing 1,614 country–year observations and 541,732 citable publications between 1996 and 2017, to explore the relationship between macroeconomic factors, research and development (R&D) expenditure and research productivity in economics and finance.FindingsThe results highlight a two-way relationship between R&D expenditure and economic development and research productivity. However, research productivity has no relationship with foreign direct investment (FDI), trade and financial development. In terms of remaining macroeconomic factors, financial development, trade and FDI have insignificant associations with research productivity in both directions of causality. In line with institutional theory, the findings support the notion that economically more developed countries and countries dedicating greater R&D funds have more potential to support research activities. On the other hand, in line with knowledge spillover, the research output of nations contributes to the economic development and expansion of R&D budgets. The results are robust to alternative methodology, endogeneity concerns, additional control variables, alternative sampling and alternative research productivity proxy.Research limitations/implicationsThe study suggests practical implications for nations to formulate macro-policies and a better research environment for academicians and to establish links between academic research and macroeconomic factors.Originality/valueFirst, as there is limited research focusing on the bidirectional causality between the macroeconomic environment and academic research activity, the study adds to the understanding of the causality relationship between these two constructs. Second, it examines the bidirectional relationship between macroeconomic factors and research output at a global scale, while prior studies mostly focus on a single country, or a certain region or continent. Further, it is one of the few attempts particularly focusing on economics and finance research's bidirectional relation with the macroeconomic environment.

Research performance of higher education in OECD countries: A hybrid multi-criteria decision-making approach

“…The second important result is that as R&D expenditures increase, the performance of countries also increases. This result supports the research of Gulbrandsen and Smeby (2005), Solarin and Yen (2016), Lee (2021), Teitel (1994), Meo et al (2013), and Uyar et al (2022). Another important result obtained from the correlation analysis is that research performance increases with the increase in the level of development of countries.…”

“…This study analyses the research performance of OECD countries and also examines the relationship between research performance and certain variables. Previous studies have shown that research performance increases with an increase in R&D expenditures (Gulbrandsen & Smeby, 2005; Lee, 2021; Meo et al, 2013; Solarin & Yen, 2016; Teitel, 1994; Uyar et al, 2022). Another variable related to research performance is the level of development of countries.…”