Abstract:

he literature discusses middle-income trap as middle income group of countries can not reach high income group. This problem arises from inability to create sufficient infrastructure during their development process. Therefore countries attempt to increase technological infrastructure-based R&D to reach high income group of countries. This study aims to assess the role R&D on MIT for European Union and Turkey. In this paper effect of R&D on MIT was investigated for EU-28 (Luxembourg, Denmark, Swedish, Netherlands, Austria, Finland, Germany, Belgium, Ireland, France, England, Italy, Spain, Cyprus, Slovenia, Greece, Portugal, Malta, Czech Republic, Estonia, Slovak Republic, Lithuania, Latvia, Poland, Croatia, Hungary, Romania, Bulgaria) and Turkey. Relationship among per capita income, R&D and savings were analyzed by using Westerlund Bootstrap Westerlund Durbin-Hausman cointegration and Hacker and Hatemi-J bootstrap causality in panel data analysis. The result of the study concludes a long term relationship among variables. A unidirectional causality was found from per capita income to R & D. But no causality effect was found from R & D to per capita income and between other variables as well.

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