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Measuring relative efficiency of government-sponsored R&D projects: A three-stage approach

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  • Hsu, Fang-Ming
  • Hsueh, Chao-Chih

Abstract

Without considering differences in operating environment, traditional methods of efficiency evaluation are suffering from external environmental influences. This study presents an alternative approach for assessing the relative efficiency of government-sponsored research and development projects (GSP). A three-stage approach employing data envelopment analysis to evaluate efficiency and Tobit regression to control external variables was applied to 110 projects over 9 years. This study finds that firm size, industry, and ratio of public subsidy on research and development (R&D) budget of recipient firm significantly influences the technical efficiency of GSP in Taiwan. After controlling these external variables, the mean value of technical efficiency in the third stage increases and becomes significantly different to that in the first stage. Most GSPs increase their returns when their projects are scaled up. Furthermore, government policy makers must establish the upper-limit ratio of subsidies on R&D budgets of recipient firms to avoid inefficient use of public funds.

Suggested Citation

  • Hsu, Fang-Ming & Hsueh, Chao-Chih, 2009. "Measuring relative efficiency of government-sponsored R&D projects: A three-stage approach," Evaluation and Program Planning, Elsevier, vol. 32(2), pages 178-186, May.
  • Handle: RePEc:eee:epplan:v:32:y:2009:i:2:p:178-186
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    Cited by:

    1. Lee, Seonghee & Lee, Hakyeon, 2015. "Measuring and comparing the R&D performance of government research institutes: A bottom-up data envelopment analysis approach," Journal of Informetrics, Elsevier, vol. 9(4), pages 942-953.
    2. Lee, Hakyeon & Shin, Juneseuk, 2014. "Measuring journal performance for multidisciplinary research: An efficiency perspective," Journal of Informetrics, Elsevier, vol. 8(1), pages 77-88.
    3. Hung, Chia-Liang, 2017. "Social networks, technology ties, and gatekeeper functionality: Implications for the performance management of R&D projects," Research Policy, Elsevier, vol. 46(1), pages 305-315.
    4. Lu, Wen-Min & Kweh, Qian Long & Nourani, Mohammad & Huang, Feng-Wen, 2016. "Evaluating the efficiency of dual-use technology development programs from the R&D and socio-economic perspectives," Omega, Elsevier, vol. 62(C), pages 82-92.
    5. Chiu, Ching-Ren & Chiu, Yung-Ho & Chen, Yu-Chuan & Fang, Chen-Ling, 2016. "Exploring the source of metafrontier inefficiency for various bank types in the two-stage network system with undesirable output," Pacific-Basin Finance Journal, Elsevier, vol. 36(C), pages 1-13.
    6. Pettas, Nikolaos & Giannikos, Ioannis, 2014. "Evaluating the delivery performance of public spending programs from an efficiency perspective," Evaluation and Program Planning, Elsevier, vol. 45(C), pages 140-150.

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