Impact of R&D investments on economic growth and konvergence of EU countries

This paper talks about the effect of R&D investments on economic growth and convergence of the NUTS 2 regions of five selected EU countries: Bulgaria, the Czech Republic, Latvia, Romania and Slovakia between years 2010 and 2019. In the first part of the paper, the main economic theory of growth will be presented – R. Solow's theory of exogenous growth and P. Romer's endogenous theory of growth – they will be compared. The comparison will show the fundamental differences between the theories, primarily in the form of the approach to technological progress, which Solow considers an exogenous variable, whereas Romer comes to believe, that it is a deliberate human activity to reduce costs in the production process and attributes to it a partial rivalry characteristic. Furthermore, the work will focus on the theory of convergence, where it will follow Solow's theory, from which it shows that with sufficient capital equipment, less developed countries will catch up with more developed ones. This is followed by the presentation of Howitt's theory of convergence clubs and Romer's theory of Charter cities. In the second part of the paper historical development of GDP, GDP per capita GERD are compared, from which it comes to the conclusion that there is a correlation between these indicators, in the form of the unity of the regions investing the most in R&D and the most successful regions in GDP and GDP per capita. Richer regions tend to invest more in research and development. This correlation is then confirmed by regression analyzes of GDP per capita and GERD, which at the same time shows tendencies to create convergence clubs, thus confirm Howitt's convergence theory. Furthermore, the development of the growth rate of GDP per inhabitant and GERD is observed, which shows differences not only in their development, but also in its values. Where GERD achieves growth in dozens of percent, GDP per capita growth is in the single digits. The last chapter is devoted to the convergence behavior of the regions, which was not confirmed based on the observation of the historical development of GDP and GDP per capita and the regression analysis of the average annual change of GDP per capita with the logarithm of GDP per capita in 2010, which shows that there is no reduction in the growth rate. However, the decreasing coefficient of variation points to a tendency to reduce regional disparities.