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The impact of private R&D on the performance of food-processing firms: Evidence from Europe, Japan and North America

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This report investigates the impact of corporate research and development (R&D) on firm performance in the food-processing industry. The agro-food industry is usually considered to be a low-tech sector (the share of total output that is attributable to R&D is around 0.27% in the EU). However, the agro-food industry is very heterogeneous. On the one hand, there are many highly innovative food-processing firms with intensive R&D activity and, on the other hand, many food-processing firms derive and adopt innovations from other sectors such as machinery, packaging and other manufacturing suppliers. We perform data envelopment analysis (DEA) with two-step bootstrapping, which allows us to correct the bias in (in)efficiency and generate unbiased estimates for (in)efficiencies. We use a corporate dataset of 307 companies from agriculture and food-processing industries from the EU, the USA, Canada and Japan for the period 1991–2009. The estimates suggest that R&D has a positive effect on firms’ performance, with marginal gains decreasing at the R&D level, and performance differences detected across regions and food sectors. General public expenditure in R&D is also associated with a positive impact on firm performance. As a result, policy support for this type of non-high-tech innovative sector is expected to generate growth. However, results that suggest heterogeneity in R&D effects across EU Member States may point to differences in the implications of innovation policies across EU regions.

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  • Pedro Andres Garzon Delvaux & Heinrich Hockmann & Peter Voigt & Pavel Ciaian & Sergio Gomez y Paloma, 2018. "The impact of private R&D on the performance of food-processing firms: Evidence from Europe, Japan and North America," JRC Research Reports JRC104144, Joint Research Centre.
    • Handle: RePEc:ipt:iptwpa:jrc104144
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    1. Hockmann, Heinrich & Garzon Delvaux, Pedro Andres & Voigt, Peter & Ciaian, Pavel & Gomez y Paloma, Sergio, 2018. "Corporate R&D and the performance of food-processing firms: Evidence from Europe, Japan and North America," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 7(3), pages 233-247.

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    Keywords

    Research and development; corporate R&D; productivity; technical efficiency; stochastic frontier analysis; DEA; double bootstrapping; agro-food; food-processing industry;
    All these keywords.

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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