Public R&D expenditure and private R&D expenditure: a causality analysis

Abstract

This paper examines the long-run and short-run causality issues between public R&D expenditure and private R&D expenditure in Korea by using the cointegration and error-correction models. The overall results show that there exists bidirectional causality between public R&D expenditure and private R&D expenditure. This means that increasing public R&D expenditure has a direct effect on private R&D expenditure and vice versa.