The Effect of Research and Development Investment on Patents
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Economists today mostly assume that investment results in gains for that particular field. In this paper, we test for the effect investment in research and development (R&D) has on technological growth. We utilize cross sectional data from 2010 and test a variety of other factors including Gross Domestic Product (GDP) per capita; average years of education; export volume into the United States; and the Leamer Index, a measurement for natural resource abundance in a country. The results from the experiment show that the R&D Expenditure has a significant effect on number of patents filed. In addition, whether or not a country was developed was found to significantly influence the number of patents filed. The various other variables including: average years of education, GDP per capita, and the Leamer Index were found to be insignificant while the exports to the US were found to have a significant effect on patents filed.