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Innovation rankings: Good, bad or revealing?

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  • Cai, Yuezhou
  • Hanley, Aoife

Abstract

The standard indicators used to compare cross-country innovation are in the Global Competitiveness Report (GCR). But there are problems with aggregation and response bias with these largely self-reported measures (Hollanders and van Cruysen, 2008). We propose a theory-based metric using Data Envelopment Analysis which corrects for sample bias and considers Returns to Scale. The derived ranking compares well to components of the GCR. Moreover, in second-stage estimations, our corrected efficiency score correlates well with standard Growth Theory indicators.

Suggested Citation

  • Cai, Yuezhou & Hanley, Aoife, 2013. "Innovation rankings: Good, bad or revealing?," Kiel Working Papers 1882, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1882
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    References listed on IDEAS

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    1. Fare, Rolf & Knox Lovell, C. A., 1978. "Measuring the technical efficiency of production," Journal of Economic Theory, Elsevier, vol. 19(1), pages 150-162, October.
    2. Léopold Simar & Paul Wilson, 2011. "Two-stage DEA: caveat emptor," Journal of Productivity Analysis, Springer, vol. 36(2), pages 205-218, October.
    3. Simar, Leopold & Wilson, Paul W., 2002. "Non-parametric tests of returns to scale," European Journal of Operational Research, Elsevier, vol. 139(1), pages 115-132, May.
    4. Charnes, A. & Cooper, W. W. & Golany, B. & Seiford, L. & Stutz, J., 1985. "Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 91-107.
    5. Wilson, Paul W., 2008. "FEAR: A software package for frontier efficiency analysis with R," Socio-Economic Planning Sciences, Elsevier, vol. 42(4), pages 247-254, December.
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    Cited by:

    1. Dzemydaitė Giedrė & Galinienė Birutė & Dzemyda Ignas, 2016. "The Efficiency of Regional Innovation Systems in New Member States of the European Union: A Nonparametric DEA Approach," Economics and Business, Sciendo, vol. 28(1), pages 83-89, April.
    2. Marko Hakovirta & Navodya Denuwara & Peter Topping & Jorma Eloranta, 2023. "The corporate executive leadership team and its diversity: impact on innovativeness and sustainability of the bioeconomy," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.

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    More about this item

    Keywords

    Data Envelopment Analysis; Efficiency Indicators; Global Competitiveness Report;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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