R&D EXPENDITURE AND GROWTH DYNAMICS IN A LOWER-MIDDLE-INCOME AFRICAN ECONOMY: EVIDENCE FROM TUNISIA

Abstract

In this paper, we make an original contribution by measuring the impact of R&D capital and knowledge accumulation on economic growth in a lower-medium income African country. For this purpose, we make use of time series data from 1996-2022 and investigate the potential causality relationship between R&D and Economic growth in Tunisia. Using ARDL model, the cointegration analysis suggests that there is a long run relationship between the two factors. However, the R&D returns to growth is relatively weak. Moreover, the results of causality test confirm only unidirectional causality from R&D expenditure to growth. Specifically, when a country experiences relatively low level of growth, no benefits of growth will be directed towards R&D and there is no feedback effect from growth to R&D.

Keywords: R&D, Economic growth, Cointegration, ARDL estimation

JEL Classification: O30, O47, O11,C23