An analysis of the interaction between R&D expenditure in industry and industry growth in Sweden 1987-2007

Abstract: This thesis disaggregates the ‘Swedish paradox’ with respect to Swedish manufacturing from 1987 to 2007. This is done by analyzing the impact of R&D expenditure in industry on industry growth of the manufacturing industry in Sweden from 1987 to 2007. A quantitative approach using panel-data from Statistics Sweden (SCB) and OECD is used to investigate the effect of R&D expenditure on economic growth. Through empirical analysis it is found that the effect of R&D expenditure in industry on industry growth is significant. The policy implications of this thesis suggest that investing in R&D in the manufacturing industry in Sweden might provide impetus behind growth of Swedish manufacturing in the competitive global economy of the 21st century. It is believed that this dissertation adds to academic literature on the ‘Swedish paradox’ by shifting analysis from the aggregate level to the meso-level/micro-level and by suggesting topics for further research.