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Evaluating countries’ innovation potential: an international perspective

Author

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  • Leontitsis, Alexandros

    (Plymouth Business School)

  • Philippas, Dionisis

    (ESSCA School of Management)

  • Sickles, Robin C.

    (Dubai Data Establishment)

  • Tziogkidis, Panagiotis

    (Rice U)

Abstract

The paper proposes a novel two-step approach that evaluates countries’ innovation efficiency and their responsiveness to expansions in their innovation inputs, while addressing shortcomings associated with composite indicators. Based on our evaluations, we propose innovation policies tailored to take into account the diverse economic environments of the many countries in our study. Applying multidirectional efficiency analysis on data from the Global Innovation Index, we obtain separate efficiency scores for each innovation input and output. We then estimate different sensitivities for each country, by applying partial least squares on explanatory and response matrices which are determined by the nearest neighbours of the country under consideration. The findings reveal substantial asymmetries with respect to innovation efficiencies and sensitivities, which is indicative of the diversity of national innovation systems. Considering these two dimensions in combination, we outline three policy directions that can be followed, offering a platform for better-informed decision-making.

Suggested Citation

  • Leontitsis, Alexandros & Philippas, Dionisis & Sickles, Robin C. & Tziogkidis, Panagiotis, 2018. "Evaluating countries’ innovation potential: an international perspective," Working Papers 18-011, Rice University, Department of Economics.
    • Handle: RePEc:ecl:riceco:18-011
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    More about this item

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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