The Impact of the Process of Financial Development on R&D Expenditures: Was Schumpeter Right?

Abstract

The purpose of this study is to investigate the effects of financial development on R&D expenditures in OECD member countries by employing panel data analysis. The results of the panel data analysis show that financial deepening does not have any significant effects on the use of intellectual property payments and the articles published in scientific and technical journal. Besides, the findings reveal that the process of financial development accelerates the level of high technology-based export, R&D expenditures, employment in R&D industries and patent applications. As a whole, it can be said that the Schumpeterian hypothesis which suggests the positive impact of financial development on technology is valid.