Impact of R&D Investment on Economic Growth and Industry Competitiveness in Indonesia

Authors

  • Loso Judijanto IPOSS Jakarta, Indonesia

DOI:

https://doi.org/10.58812/wsaf.v2i03.1433

Keywords:

R&D Investment, Economic Growth, Industrial Competitiveness, Innovation, Indonesia

Abstract

This study examines the impact of research and development (R&D) investment on economic growth and industrial competitiveness in Indonesia, focusing on 55 industrial sectors. Using a quantitative approach, data were collected through a structured Likert scale survey and analyzed with SPSS version 26. The results demonstrate a significant positive relationship between R&D investment and both economic growth and industrial competitiveness. Regression analysis reveals that R&D investment accounts for 58% of the variance in economic growth and 62% of the variance in industrial competitiveness. These findings highlight the pivotal role of R&D in fostering innovation, enhancing productivity, and achieving global competitiveness. Policymakers and industry stakeholders are encouraged to prioritize R&D funding to drive sustainable economic development in Indonesia.

References

M. H. Plahonjić, “Importance of Research and Development for Economic Growth,” Uprava, vol. 15, no. 1, pp. 38–48, 2024.

D. GAVRILUŢ, D. BĂDULESCU, and J. JAGANJAC, “THE ROLE OF R&D SECTOR ON FOSTERING ECONOMIC GROWTH. INSIGHTS FROM ROMANIA”.

I. H. Shah, K. Kollydas, P. Y. Lee, I. Malki, and C. Chu, “Does R&D investment drive employment growth? Empirical evidence at industry level from Japan,” Int. J. Financ. Econ., vol. 29, no. 1, pp. 102–118, 2024.

C. Liu, Y. Chen, S. Huang, X. Chen, and F. Liu, “Assessing the Determinants of Corporate Risk-Taking Using Machine Learning Algorithms,” Systems, vol. 11, no. 5, May 2023, doi: 10.3390/systems11050263.

D. Badulescu et al., “The Relationship between Sustainable Economic Growth, R&D Expenditures and Employment: A Regional Perspective for the North-West Development Region of Romania,” Sustainability, vol. 16, no. 2, p. 760, 2024.

D. Rudi Purwono, M. A. E. Padilla, L. Sugiharti, D. Unggul Heriqbaldi, and R. D. Handoyo, “Value chains, production networks and regional integration: The case of Indonesia,” J. Ekon. Malaysia, vol. 54, no. 1, pp. 135–151, 2020.

A. Febriansyah and F. Hartanto, “Maximizing Appropriate Technology to Advance Development in Indonesian Economic Through Industrial Revolution 4.0,” in Proceedings of the 1st International Conference on Informatics, Engineering, Science and Technology, INCITEST 2019, 18 July 2019, Bandung, Indonesia, 2019.

D. Margiansyah, “THE LIMITS OF INDUSTRIALIZATION IN POST-ORDE BARU INDONESIA”.

K. Kim, A. Sumner, and A. A. Yusuf, “Is structural transformation-led economic growth immiserising or inclusive? The case of Indonesia,” 2018.

H. Aswicahyono and H. Hill, “Indonesian industrialisation and industrial policy: Catching up, slowing down, muddling through,” in The Indonesian Economy: Trade and Industrial Policies, Routledge, 2017.

Y. Liu, Z. Yang, C. Zhu, B. Zhang, and H. Li, “The eco-agricultural industrial chain: the meaning, content and practices,” Int. J. Environ. Res. Public Health, vol. 20, no. 4, p. 3281, 2023.

R. A. Fatmawati, A. Pradhanawati, and N. Ngatno, “Pengaruh orientasi pasar, orientasi kewirausahaan terhadap keunggulan bersaing dan kinerja pemasaran pada warung kucingan/angkringan di Kota Semarang,” J. Ilmu Adm. Bisnis, vol. 5, no. 3, pp. 351–362, 2016.

A. Mardani, D. Streimikiene, M. Nilashi, D. Arias Aranda, N. Loganathan, and A. Jusoh, “Energy consumption, economic growth, and CO2 emissions in G20 countries: application of adaptive neuro-fuzzy inference system,” Energies, vol. 11, no. 10, p. 2771, 2018.

X. Wang, X. Song, and M. Sun, “How Does a Company’s ESG Performance Affect the Issuance of an Audit Opinion? The Moderating Role of Auditor Experience,” Int. J. Environ. Res. Public Health, vol. 20, no. 5, Mar. 2023, doi: 10.3390/ijerph20053878.

T. H. W. Ziesemer, “Evidence on an endogenous growth model with public R&D,” Econ. Innov. New Technol., pp. 1–37, 2024.

P. K. Kruse‐Andersen, “Testing R&D‐Based Endogenous Growth Models,” Oxf. Bull. Econ. Stat., vol. 85, no. 5, pp. 1083–1110, 2023.

M. A. Verba, “Growth and innovation in the presence of knowledge and R&D accumulation dynamics,” Econ. Innov. New Technol., vol. 31, no. 6, pp. 485–510, 2022.

G. Bella, K. Kogan, P. Mattana, D. Tsadikovich, and B. Venturi, “Does boundary solutions of the Lucas endogenous growth model explain why some countries are not accumulating human capital?,” 2023.

U. İSMİHAN and F. Muazzez, “Knowledge and Economic Growth: A Dynamic Panel Data Analysis for OECD Countries.,” Ekon. Yaklaşim, vol. 34, no. 127, 2023.

M. A. M. Moustapha and Q. Yu, “Innovation effect through research and development on economic growth in 35 OECD countries,” J. Innov. Sustain. Risus, vol. 11, no. 4, pp. 159–166, 2020.

S. Y. Baswara, R. Widhiastuti, K. Fajarwati, and D. E. Sari, “Company Reputation in The Era of Covid 19 as Moderating Variable for The Relationship Between CSR, Company Assets Growth and Company Performance,” in ICE-BEES 2021: Proceedings of the 4th International Conference on Economics, Business and Economic Education Science, ICE-BEES 2021, 27-28 July 2021, Semarang, Indonesia, European Alliance for Innovation, 2022, p. 226.

J.-J. Minviel and F. Ben Bouheni, “The impact of research and development (R&D) on economic growth: new evidence from kernel-based regularized least squares,” J. Risk Financ., vol. 23, no. 5, pp. 583–604, 2022.

R. P. Pradhan, “The Effect of R&D on Economic Growth: Evidence from Cross-Country Panel Data,” J. Dev. Areas, vol. 57, no. 4, pp. 245–256, 2023.

R. Khoirudin, “The Role Of Research And Development (R&D) On Gross Domestics Products (GDP)(Case Study USA, China, Japan, Germany and UK),” in Journal of International Conference Proceedings, 2023, pp. 1–13.

S. Kubitskyi, D. Yeremenko, V. Danylenko, S. Bataiev, and E. Varaksina, “Evaluating the impact of innovative technologies on global competitiveness through modelling,” Multidiscip. Sci. J., vol. 6, 2024.

P. López-Rubio, N. Chaparro-Banegas, A. Mas-Tur, and N. Roig-Tierno, “The road to national competitiveness is paved with innovation and entrepreneurship: a qualitative comparative analysis,” Policy Stud., pp. 1–22, 2024.

B. G. Agazu and C. A. Kero, “Innovation strategy and firm competitiveness: a systematic literature review,” J. Innov. Entrep., vol. 13, no. 1, p. 24, 2024.

M. Cincera, E. Ince, and A. Santos, “Revisiting the innovation-competition nexus: Evidence from worldwide manufacturing and service industries,” Struct. Chang. Econ. Dyn., vol. 69, pp. 586–603, 2024.

G. H. Xie, L. P. Wang, and B. F. Lee, “Understanding the Impact of Social Capital on Entrepreneurship Performance: The Moderation Effects of Opportunity Recognition and Operational Competency,” Front. Psychol., vol. 12, Jun. 2021, doi: 10.3389/fpsyg.2021.687205.

Y. Wang, “The Impact of Research Development and Innovation on Enterprise Development: Case Study of BYD and Pfizer,” Adv. Econ. Manag. Polit. Sci., vol. 17, pp. 65–70, 2023.

P. Barbaroux, “From market failures to market opportunities: managing innovation under asymmetric information,” 2014.

Downloads

Published

2024-11-29

How to Cite

Judijanto, L. (2024). Impact of R&D Investment on Economic Growth and Industry Competitiveness in Indonesia. West Science Accounting and Finance, 2(03), 544–551. https://doi.org/10.58812/wsaf.v2i03.1433

Issue

Vol. 2 No. 03 (2024): West Science Accounting and Finance

Section

Articles

License

Copyright (c) 2024 Loso Judijanto

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.