Research output and economic growth in G7 countries : new evidence from asymmetric panel causality testing

Abstract

Recent studies have shown increasing interest on the relationship between research output and economic growth. The study of such a relationship is not only of theoretical interest, but it can also influence specific policies to improve the quality, and probably the quantity of research output. This paper has studied this relationship in G7 countries using the asymmetric panel causality test of Hatemi-J (2011). Our results show that only the United Kingdom shows a causal relationship from the output of research to real GDP. However, when the signs of variations are taken into account, there is an asymmetric causality running from negative research output shocks to negative real GDP shocks.