Determination of Country-Specific Effects of Technological Gap

This study aims to analyze the determination of country-specific effects of technology gap in the European Union. For this reason, this study employs technology gap model and shows that the determinants of technology gap for the European Union countries for the period 1998-2016. Balanced panel data method was used in the analysis. It is presented empirical tests of the theory for 22 European Union countries. It is found that patent application growth rate and Gross Domestic Product per person employed growth rate effect technology gap. Owing to the Common Correlated Effect Model we are able to see these effects for each country. This gives the opportunity to develop country-specific economic policy. In this way, economic policy practitioners can develop more effective policies for countries, even if they are involved in an economic integration