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Effects of R&D spending on Innovation by Irish and Foreign-owned Businesses

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  • Doran, Justin
  • Jordan, Declan
  • O'Leary, Eoin

Abstract

This paper estimates the private returns to four different kinds of R&D spending on the probability of Irish and foreign-owned businesses engaging in product, process and organizational innovation. By providing econometric analysis of nearly 2000 businesses in the Community Innovation Survey: 2004 to 2006, it makes an important contribution to our understanding of the effects of Irish innovation policy, which has incentivized businesses to spend on R&D in Ireland. The main findings are that Irish owned businesses are significantly more likely than foreign-owned to introduce new products as a result of creative R&D work undertaken. Foreign-owned businesses, which spend nearly 6 times more per worker on R&D than Irish-owned, enjoy very high returns mostly from the purchase or licence of patents. This reflects a fundamental difference in the innovation activities of these businesses, which is critical for policymakers’ understanding of the Irish innovation system.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 44579.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:44579

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Related research

Keywords: Innovation Policy; Innovation Output; Research & Development;

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References

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  1. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
  2. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
  3. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
  4. Doran, Justin & Jordan, Declan, 2012. "Cross Sectoral Differences in Drivers of Innovation," MPRA Paper 44470, University Library of Munich, Germany.
  5. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 15(4-5), pages 317-344.
  6. repec:fth:harver:1473 is not listed on IDEAS
  7. Pavitt, Keith, 1984. "Sectoral patterns of technical change: Towards a taxonomy and a theory," Research Policy, Elsevier, vol. 13(6), pages 343-373, December.
  8. Roper, Stephen & Du, Jun & Love, James H., 2008. "Modelling the innovation value chain," Research Policy, Elsevier, vol. 37(6-7), pages 961-977, July.
  9. Bruno Crépon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation and Productivity : An Econometric Analysis at the Firm Level," Working Papers 98-33, Centre de Recherche en Economie et Statistique.
  10. Lööf, Hans & Heshmati, Almas, 2000. "Knowledge Capital and Performance Heterogeneity: A Firm Level Innovation Study," Working Paper Series in Economics and Finance 387, Stockholm School of Economics, revised 14 Aug 2000.
  11. Justin Doran & Eoin O'Leary, 2011. "External Interaction, Innovation and Productivity: An Application of the Innovation Value Chain to Ireland," Spatial Economic Analysis, Taylor and Francis Journals, vol. 6(2), pages 199-222.
  12. Freel, Mark S., 2003. "Sectoral patterns of small firm innovation, networking and proximity," Research Policy, Elsevier, vol. 32(5), pages 751-770, May.
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