Jan Hunady

Faculty of Economics, Matej Bel University in Banska Bystrica 

Slovakia

Email: jan.hunady@umb.sk

Innovation support and economic development at the regional level: panel data evidence from Visegrad countries

Peter Pisar

Faculty of Economics, Matej Bel University in Banska Bystrica 

Slovakia

Email: peter.pisar@umb.sk

Hussam Musa

Faculty of Economics, Matej Bel University in Banska Bystrica

Slovakia

Email: hussam.musa@umb.sk

Zdenka Musova

Faculty of Economics, Matej Bel University in Banska Bystrica

Slovakia

Email: zdenka.musova@umb.sk

Abstract. The paper deals with the problem of innovation support and economic development at the regional level. The innovation potential still differs significantly among the EU regions. Perhaps the key factor determining innovation potential and performance of a region is R&D expenditure. The main aim of the paper is to test the potential relationship between gross domestic expenditure on R&D and economic development of the regions. Our dataset consists of the data on the regions of four Visegrad countries during the period of 2001-2014. We assume the existence of non-linear relationship and expect that R&D expenditures are significantly lower in less developed regions. Using the panel Granger causality and panel regression analysis based on these data, we provide insight into the potential relationship between regional economic development measured in terms of GDP per capita and investments in R&D controlling for the number of R&D employees. Our results strongly suggest that higher regional GDP per capita is associated with higher regional gross domestic expenditure on R&D (GERD) per inhabitant. GERD per capita appears to be exponentially rising with regional GDP per capita. We have also found significant regional disparities in terms of innovation performance.

Received: June, 2017

1st Revision: July, 2017

Accepted: October, 2017

DOI: 10.14254/2071-8330.2017/10-3/11

JEL Classification: O30, O32, R58

Keywords: innovation support, R&D expenditure, economic development, European Union, NUTS 2 regions