Regional efficiency of knowledge economy in the new EU countries: The Romanian and Bulgarian case

The economic success is more and more based on upon the effective utilization of intangible assets such as knowledge, skills and innovative potential as the key resource for competitive advantage. For transition countries, such as Romania and Bulgaria, the efficiency of research and development activities is particularly important, since technological progress is one of the core aspects of economic growth. In this article we describe the common features of the two countries, but also the existing differences in respect with knowledge based economy. There are significant regional differences within the countries and marginal regions must close the gap with more developed regions. The paper analyzes research efficiency at the regional level for NUTS2 regions from Romania and Bulgaria between 2003 and 2005, applying a DEA framework. Our main finding is that Bulgarian regions are more efficient in R&D activities compared to Romanian ones. The only Romanian efficient region is Bucuresti Ilfov, while the other two efficient regions are rather small Bulgarian regions, with fewer resources. They show a remarkably high level of research efficiency, whereas some of the larger regions (both from Romania and Bulgaria) lag behind.