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Business R&D investments in the EU: Main dynamics and economic effects


  • Mihaela DIACONU

    (The “Gheorghe Asachi” Technical University of Iasi, Romania)


Research and development expenditures are known as drivers of innovation and productivity. This paper aims at investigating two interrelated aspects of business R&D investments in the EU: the main features and trends in business R&D investments and their impact on company′s performance. The results from preceding descriptive analysis on the most recent dynamics in the EU's R&D investments indicate the persistence of several characteristics highlighted also in the literature, such as an increasing business R&D intensity gap between the EU and its main competitors, large differences registered in the total R&D investment intensity across EU countries, sectors and firms and industrial R&D concentration at the level of a few players. The positive impact of R&D investments on company's performance in terms of net sales and operating profit is shown by conducting several econometric models. We also investigate whether the size has an effect on the R&D investments performed by companies exploiting data from the EU industrial R&D investment Scoreboard.

Suggested Citation

  • Mihaela DIACONU, 2019. "Business R&D investments in the EU: Main dynamics and economic effects," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(621), W), pages 19-34, Winter.
  • Handle: RePEc:agr:journl:v:xxvi:y:2019:i:4(621):p:19-34

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    References listed on IDEAS

    1. Mihaela DIACONU, 2017. "Private equity market developments in central and Eastern Europe," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(611), S), pages 131-146, Summer.
    2. Andrea Vaona & Mario Pianta, 2008. "Firm Size and Innovation in European Manufacturing," Small Business Economics, Springer, vol. 30(3), pages 283-299, March.
    3. Feng-Jui Hsu & Mu-Yen Chen & Yu-Cheng Chen & Wei-Chieh Wang, 2013. "An Empirical Study on the Relationship between R&D and Financial Performance," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 3(5), pages 1-9.
    4. Coad, Alex, 2019. "Persistent heterogeneity of R&D intensities within sectors: Evidence and policy implications," Research Policy, Elsevier, vol. 48(1), pages 37-50.
    5. Alex Coad, 2017. "Persistent heterogeneity of R&D intensities within sectors: Evidence and policy implications," JRC Working Papers on Corporate R&D and Innovation 2017-04, Joint Research Centre (Seville site).
    6. Gheorghe ZAMAN & Zizi Goschin, 2012. "Industrial R&D Investment In Eu: Recent Trends And Lessons For Romania," Romanian Journal of Economics, Institute of National Economy, vol. 34(1(43)), pages 68-83, June.
    7. Raquel Ortega-Argilés & Andries Brandsma, 2010. "EU-US differences in the size of R&D intensive firms: do they explain the overall R&D intensity gap?," Science and Public Policy, Oxford University Press, vol. 37(6), pages 429-441, July.
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