R&D Expenditures on Innovation: A Panel Cointegration Study of the E.U. Countries

In academic discussions about how to achieve sustainable growth in the world, it is stated that this not possible without spending on research and development innovative activities so countries can maintain their competitiveness global environment. The EU has defined strategies consider innovation as a key element for stimulating creatung employment. context, study examines relationship between R&D expenditures index scope of countries. A PVAR model annual data from 2007 2020 were used We first examined cross-sectional cross-country homogeneity slopes. second-generation unit root test was then applied using Pesaran CIPS (2007) test, ARDL panel cointegration. Causal analyses with error correction determine relationships variables direction. For long-term dynamic effects variables, an impulse response function (IRF) used, degree effect index, variance decomposition used. results paper reveal positive significant whereas short-term, negative. Furthermore, causality show unidirectional short-run long-run Finally, enhances understanding