Unraveling the Nexus: Exploring the Link between Research and Development and Economic Performance in the EU

Abstract

Understanding the mechanisms by which R&D influence economic outcome is vital for promoting long-term growth, innovation-driven development, and the overall resilience of the EU's economic framework as Europe faces twenty-first-century challenges. This study explores the association among R&D and economic success in the European Union. The study attempts to provide new insights on their dynamic relationships by examining measures such as R&D expenditure (R_DEXP), patents (PAT), the number of researchers (R_DE), and value added in the professional and scientific sector (VAL). The data from 2000 to 2022 of EU nations has been extracted from OECD and WDI for this research. The study exposes both short-term dynamics and long-term impacts by utilizing the ARDL technique. The results of long run ARDL shed light on the long-term impact of patent applications, R&D personnel, and R&D expenditures on economic growth, enriching our understanding of the model's overarching dynamics and emphasizing the crucial significance of sustained R&D in fostering economic prosperity.