Abstract

The goal of my research is to study the relationship between research density and economic growth. I also aim to examine if this relationship is dependent on the development status of the country. My theoretical section uses the Romer model of endogenous growth to explain this relationship, permitting flexibility in the theoretical predictions based on parameter assumptions such as productivity of researchers, knowledge externality and the discovery rate of ideas. The theory demonstrates the existence of a positive relationship between research density and aggregate economic output caused by temporary increases in the economic growth rate determined by technological progress. Under my parameter assumptions, the theory also suggests higher income countries are more likely to observe larger changes in economic output due to inherently higher values of the discovery rate of ideas. The study employs a Two-Way Fixed Effects OLS regression analysis model using Panel Data techniques for 35 countries from the World Bank development indicators for the period of 1999-2023. The empirical results demonstrate that increasing the number of researchers per million citizens by one unit of a country increased the GDP per person of that country by $4.614 purchasing power adjusted dollars. The comparative data analysis shows research density is more efficacious in developing economies. These results emphasize the need for countries to focus on innovation policy to improve the income level of its citizens.

Advisor

Davison, Colin

Department

Economics

Disciplines

Business Analytics | Business Intelligence | Econometrics | Economic Policy | Growth and Development | International Economics | Macroeconomics | Management Sciences and Quantitative Methods | Political Economy | Strategic Management Policy | Taxation

Publication Date

2025

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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