The Significance of Research And Development For Economic Growth: The Case of Pakistan

Abstract

This paper concentrates on the significance of Research and Development (R&D) for
economic growth in the developing economy of Pakistan. The paper also questioned the
major macro determinants of R&D in Pakistan. The study used time series data for the
period 1971-2008. The results obtained from the Ordinary Squares Method showed that
R&D significantly affects the Real GDP per capita in Pakistan. Health, labour force ,
and Physical capital are among the other determinants of Real GDP per capita. The
results further show that real GDPper capita and quality of educational institutions are
the significant factors which affect R&D. The Johansen Cointegration test confirmed
the existence of long run relationship between R&D and economic growth. Similarly,
R&D and its determinants were also found in long run relationship. It is therefore
recommended to increase investment in R&D to achieve sustained economic growth. It
is also recommended to collect and record quality R&D data for effective policy making
in the field of science and technology, and social sectors in Pakistan.