THE IMPACTS OF CAPITAL INTENSITY AND R&D SPENDING ON MANUFACTURING INDUSTRY VALUE ADDED IN INDUSTRY 4.0 PROCESS: A PANEL DATA ANALYSIS

Industry 4.0 or 4th Industrial Revolution is a phenomenon, which is being discussed more day by day all around the world, and it is undoubtedly a fact to be taken into consideration with all aspects of the situation because it is the latest generation of the revolutions. From this perspective, in this paper, the relationship between drivers of production of industry 4.0 and manufacturing value added that is the core of economic development/growth is determined using panel data covering the nine leading countries in the industry 4.0 process over the period 1996-2015. Empirical results of this study was applied by the Dumitrescu-Hurlin (2012) panel Granger causality test, which takes into account cross-sectional dependence indicate one-way causality from capital intensity to manufacturing value added, two-way causality between R&D expenditures as a share of GDP and manufacturing value added in the selected country group. In addition, empirical findings showed that greater capital intensity and R&D expenditures of GDP, which are the input variables of industry 4.0 process significantly increase manufacturing value added, which is the one of the output variables of the process.