Abstract

This paper examines the relationships between the aggregate R&D activities of the EU and the US using multivariate Granger-causality tests. Our estimation results indicate that the EU reacts positively to increases in R&D productivity in the US. On the other hand, R&D activity in the EU is a direct Granger-cause of both R&D and labour productivity in the US, and the effects are negative. It was shown in the literature that the US reacts submissively to successful Japanese R&D. We extend the literature by demonstrating that the US also reacts submissively to increased R&D effort in the EU.

Recommended Citation

Atukeren, Erdal (2007) "A Causal Analysis of the R&D Interactions between the EU and the US," Global Economy Journal: Vol. 7 : Iss. 4, Article 1.
Available at: http://www.bepress.com/gej/vol7/iss4/1