The Dynamic Relationship Between Spending on Research and Development (R&D) and the Growth of Start-Ups in Algeria:

Abstract

This study aims to analyze the dynamic relationship between research and development spending and the growth of startups in Algeria during the period between 2010 and 2025, using the Autoregressive Distributed Lag (ARDL) methodology. We relied on quarterly data for the study variables in addition to a dummy variable (D-2020) in order to absorb the structural change that occurred in emerging institutions in 2020. The results showed a co-integration relationship between the study variables, as the study model has a self-correction mechanism estimated at 7%, restoring the system to its balance when any imbalance occurs in the short term. The results also revealed that financial spending on research and development during the study period did not reach the level necessary to stimulate innovation in emerging institutions, and any future and stable increase will inevitably lead to a strong response in their growth. While the growth that occurred was a result of private sectordirected credit, in addition to the structural reforms that took place in this sector.