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The contribution of R&D to production efficiency in OECD countries: econometric analysis of industry-level panel data

Author

Listed:
  • Margo Liik

    (Faculty of Economics and Business Administration, University of Tartu, Tartu, Estonia)

  • Jaan Masso

    (Faculty of Economics and Business Administration, University of Tartu, Tartu, Estonia)

  • Kadri Ukrainski

    (Faculty of Economics and Business Administration, University of Tartu, Tartu, Estonia)

Abstract

While research and development expenditures are considered a key to productivity growth and development, the question remains whether their contribution could depend on the particular countries’ and industries’ actual development levels and positions in global value chains. In this paper we analyse the relative contribution of R&D to the efficiency (productivity) on the industry and sector level in OECD countries using industry-level panel data and the stochastic frontier production function approach. The results indicate that R&D capital productivity enhancing effect increases with the level of technology; physical capital shows the opposite effect. The distribution of efficiency across industries shows remarkably different variances, reflecting different degrees of competition and the structure of value chains. Among different external factors, the share of labour with tertiary education at the national level showed a strong positive correlation with efficiency, while for other external factors the effect varied across the industries. The findings imply that in the design of R&D policy measures the structure of the industries needs to be considered.

Suggested Citation

  • Margo Liik & Jaan Masso & Kadri Ukrainski, 2014. "The contribution of R&D to production efficiency in OECD countries: econometric analysis of industry-level panel data," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 14(1-2), pages 78-100, December.
    • Handle: RePEc:bic:journl:v:14:y:2014:i:1-2:p:78-100
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    File URL: http://www.tandfonline.com/doi/pdf/10.1080/1406099X.2014.981105
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    Citations

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    Cited by:

    1. Clara Inés Pardo Martínez & Alexander Cotte Poveda, 2021. "Science, technology, innovation, theory and evidence: the new institutionality in Colombia," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(3), pages 845-876, June.
    2. Jaan Masso & Amaresh K Tiwari, 2021. "Productivity Implications Of R&D, Innovation And Capital Accumulation For Incumbents And Entrants: The Case Of Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 130, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    3. Ge Zehui & Ren Zhengkun & Jia Yiheng & Hu Qiying, 2021. "A Bounded Commitment in Vertical Collaborations of New Product Development," Journal of Systems Science and Information, De Gruyter, vol. 9(2), pages 154-174, April.
    4. V. A. Gurtov & L. V. Shchegoleva, 2018. "Forecasting the Economic Need for Personnel with Higher Scientific Qualifications," Studies on Russian Economic Development, Springer, vol. 29(4), pages 415-422, July.
    5. Ge, Zehui & Hu, Qiying & Goh, Chon-Huat & Zhao, Rui, 2021. "Action-dependent commitment in vertical collaborations: The effect of demand-creating innovations in a supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    6. Jaan Masso & Amaresh K Tiwari, 2022. "Productivity Implications of R&D, Innovation, and Capital Accumulation for Incumbents and Entrants: Perspectives from a Catching-up Economy," Papers 2205.10540, arXiv.org.

    More about this item

    Keywords

    efficiency; R&D; SFA; technological change;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

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