R&D and economic growth in Slovenia: A dynamic general equilibrium approach with endogenous growth

Abstract

In the article, we model R&D as a major endogenous growth element in a small open economy general equilibrium framework and consider several R&D policy scenarios for Slovenia. Increase of the share of sectoral investment in R&D that is deductible from the corporate income tax and increase of government spending on R&D turned out to be the most effective suggested policy measures. While the former policy measure is still followed in part by an undesired transfer of the tax relief to dividends, a moderate increase of government spending on R&D boosts long-run productivity in the economy, thus increasing the future value of firms, which is reflected in a desired dividend increase. The households that would gain more utility from such policy scenarios are those with more skilled and highly skilled labour, but not the very top earners in the economy.

Human Capital, Higher Education Enrolment and Economic Growth in the SSA Countries (Panel Model Approach)

“…It is again noted that the total factor productivity and human capital having the values of 0.2252 and 0.3584 respectively exhibit a very weak relationship with GDP. This is seen to be in contrast with the study carried out on synovia by Verbic et al (2009) who found economic growth to be endogenously determined in the model by the development of human capital stock as well as the development over time of the overall total factor productivity. Furthermore, the table further showed a negative (-0.0037) relationship between higher education enrolment and total factor productivity and consequently a weak relationship (0.0031) was seen to exist between human capital and higher education enrolment.…”

“…Although many factors have been identified that determine economic growth, human capital is fundamentally unique (Barro, 1996;Mankiw et al, 1992;Hanushek & Kimko, 2000). The importance and uniqueness of human capital as a growth factor is premised on the fact that, its skills determine growth in productivity (Verbic et al, 2009). Again, among those factors that determine human capital, education is germane (Glewwe, Maiga, and Zheng, 2007;Hassan and Ahmed (2008).…”

“…With efficient allocation of factor input, it is expected that productivity should grow. Investment in education and human capital are the major determinants of productivity growth (Verbic, Majcen, & Cok, 2009). Having known that human capital is so important, investment into it is germane and will be the secret of prosperity of any nation, and no investible fund spent in the right direction on education will be seen as a wasted effort.…”

Earmarking Tax for Indonesia's Economic Growth through the Education and Health Sector in the Long and Short Term Period

“…Additionally, choices are identified with the measure of time given to the amassing of human capital. For instance, labour income tax may give a disincentive to people to collect human capital because the tax will reduce future net income (Annabi, Harvey, & Lan, 2011;Blankenau, Simpson, Blankenau, & Simpson, 2004;Del Rey & Lopez-Garcia, 2013;Verbic, Majcen, & Cok, 2009;Yeldan, 2000).…”

Exploring the Relationship between Government R & D Expenditures and Economic Growth in a Global Perspective: A PMG Estimation Approach

“…Various theories during this decade highlight the importance of investment in R&D. Planned economic behavior and human capital affect long-term economic growth (Verbic et al, 2011). Investment in both R& D along with human capital is a primary determinant to increase efficiency.…”