Corporate R&D and Firm Efficiency: Evidence from Europe's Top R&D Investors - IPTS WORKING PAPER on CORPORATE R&D AND INNOVATION - No. 11/2010
The main objective of this study is to investigate the impact of corporate R&D activities on firm performance, measured by labour productivity. To this end, the stochastic frontier technique is used on a unique unbalanced longitudinal dataset on top European R&D investors over the period 2000¿2005. The study quantifies technical inefficiency of individual firms. From a policy perspective, the results of this study suggest that ¿ if the aim is to leverage firms¿ productivity ¿ emphasis should be put on supporting corporate R&D in high-tech sectors and, to some ex-tent, in medium-tech sectors. On the other hand, corporate R&D in the low-tech sector is found to have a minor effect in explaining productivity. Instead, encouraging investment in fixed assets appears important for the productivity of low-tech industries. Hence, the allocation of support for corporate R&D seems to be as important as its overall increase and an ¿erga omnes¿ approach across all sectors appears inappropriate. However, with regard to technical efficiency, R&D intensity is found to be a pivotal factor in explaining firm efficiency. This is true for all industries.
KUMBHAKAR Subal;
ORTEGA-ARGILÉS Raquel;
POTTERS Lesley;
VIVARELLI Marco;
VOIGT Peter;
2010-12-21
Publications Office of the European Union
JRC62369
978-92-79-18946-3,
1831-872X / 1018-5593,
EUR 24325 EN/11,
OP LF-NJ-24325-EN-C,
http://iri.jrc.ec.europa.eu/papers.htm,
https://publications.jrc.ec.europa.eu/repository/handle/JRC62369,
10.2791/51603,
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