THE NONLINEAR EFFECTS OF HIGH TECHNOLOGY EXPORTS, R&D AND PATENTS ON ECONOMIC GROWTH: A PANEL THRESHOLD APPROACH TO 35 OECD COUNTRIES

The paper aims at the investigation of the economic growth and R&D thresholds in addition to the evaluation of nonlinear effects of R&D, patents and high technology product exports on economic growth. Within this respective, a panel consisting of 35 OECD member and other countries is analysed with dynamic panel threshold regressions and bootstrap threshold testing methodologies for the 1992–2016 period. The results reveal significant threshold effects of the economic growth rates closely followed by the threshold effects dominated by the share of R&D in the GDP. The empirical findings have significant contributions: i. the impacts of high technology exports are asymmetric and regime-dependent, in addition, positive in both regimes, ii. R&D expenditures have positive effects not only in the high R&D/GDP but also in relatively low R&D/GDP and growth regimes, iii. the R&D in GDP threshold parameter is estimated as close to 0.7% and is compared to the literature. The overall findings coincide with the endogenous growth literature, but with an interesting distinction regarding the positive impacts even at low R&D regimes. The policy suggestions favor the encouragement of R&D and its positive effects on economic growth even for countries that cannot achieve a theoretical 3% R&D in GDP threshold.