What is Research and Development

The aim of this chapter is to examine the impact of investment in research and development on economic growth, as well as the nature of the impact of trade openness and foreign direct investment on extended Balkan Silk Road economies. The authors used the general econometric specification of the regression panel model and for the period from 2002 to 2018. The results showed that expenditures on research and development and trade openness have a significant positive effect on the gross domestic product of the countries with lower GDP per capita, while foreign direct investment in these countries has a neutral and nonsignificant impact on gross domestic product. For the countries with higher GDP per capita, expenditures on research and development have a marginally negative effect on the gross domestic product. Trade openness is significantly positive, while foreign direct investments have a significant but neutral effect on the gross domestic product. The main limitations of the research are the use of data on total R&D investment and foreign trade relations instead of sectoral.