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Creating Innovations, Productivity and Growth - the efficiency of Icelandic firms

Author

Listed:
  • Ho, Dong-huyn

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Lööf, Hans

    () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

Iceland is one of the smallest European economies and the country was hit severely by the 2008-financial crisis. This paper considers the economy in the period preceding the collapse. Applying a Data Envelopment Analysis on 204 randomly selected firms, the results suggest that a substantial fraction of the Icelandic firms can be classified as non-efficient in their production process. The production scale of many manufacturing firms is too small to be technically efficient, while service firms typically use excessive resources in their production process. A remarkably weak performance in transforming R&D and labour efforts into successful innovations is observed.

Suggested Citation

  • Ho, Dong-huyn & Lööf, Hans, 2009. "Creating Innovations, Productivity and Growth - the efficiency of Icelandic firms," Working Paper Series in Economics and Institutions of Innovation 162, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0162
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Technical efficiency; R&D; Innovation; Productivity;

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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