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THE IMPACT OF GOVERNMENT R&D IN STIMULATING PRIVATE R&D IN OECD COUNTRIES (1981-1998)

In this study, it is attempted to identify the relationship between the private and government R&D expenditures based on an analysis conducted for OECD countries for the period 1981-1998. Two phases were distinguished with regard to the comparative levels of private and government R&D expenditures: (i) First phase in which government R&D expenditures remain higher than the private R&D expenditures and (ii) Second phase in which the reverse holds. The hypothesis tested in this study is that in the first phase government R&D activity is very crucial for the private sector R&D performance. For the second phase, the performance of private sector, rather, relies heavily on its accumulated capacity. Empirical findings support the evolution pattern of government-private relation in R&D activity.