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Evolution of EU corporate R&D in the global economy: intensity gap, sectors' dynamics, specialisation and growth

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  • Pietro Moncada Paternò Castello

Abstract

The Thesis is composed by three complementary research investigations on the economic and policy aspects of EU corporate R&D.Collectively, the work first reviews the theoretical and empirical literature of corporate R&D intensity decomposition; it then investigates the EU R&D intensity and its decomposition elements comparatively with most closed competitors and with emerging economies over the period 2005-2013. Finally, it inspects further some key aspects that can be associated to the EU R&D intensity gap: sectoral dynamics and the resulting sectoral and technological specialisations as well as the drivers for R&D investment growth across sectors and firms' age groups of top R&D investing firms over time. These studies also address the possible policy implications that derive from their outcomes.The investigations rely on literature as well as on company data, mainly from nine editions (2006-2014) of the EU Industrial R&D Investment Scoreboard. For analytical purposes they use literature review, meta-analysis, descriptive statistics, R&D intensity decomposition computational approach, Manhattan distance and Technological Revealed Comparative Advantage metrics, and a multinominal logit regression model. The results of these three research works are novel in several aspects. It indicates that literature results on R&D intensity decomposition differ because of data and methodological heterogeneities, and that the structural cause is the main determinant of EU R&D intensity gap if sector compositions of the countries are considered. It inspects how the use of different data sources and analytical methods impact differently on R&D intensity decomposition results, and what the analytical and policy implications are.The empirical research results of this Thesis confirm the structural nature of the EU R&D intensity gap. In the last decade the gap between the EU and the USA has widened, whereas the EU gap with Japan has remained relatively stable. In contrast, the emerging countries' R&D intensity gap compared to the EU has remained relatively stable, while companies from emerging economies are considerably reducing such gap. Besides, as novel contribution to the state of the art of the literature, this Thesis uncovers the differences between EU and US by inspecting which sectors, countries and firms are more accountable for the aggregate R&D intensity performance of these two economies, and it finds a high heterogeneity of firms' R&D intensity within sectors. Furthermore, it shows that there is a bigger population of both larger and smaller US top R&D firms which invest more strongly in R&D than competitors, and that the global R&D investment is concentrated in a few firms, countries and industries. Finally, the research founds a slightly higher EU R&D shift over sectors compared to the US, but not strongly enough towards high-tech sectors. Also, the EU has an even broader technological specialisation than its already broad industrial R&D sector specialisation, while the USA leads by number of technological fields belonging mostly to the industrial R&D sectors of its specialisation. Furthermore, the EU has been better able than the USA and Japan to maintain its world share of R&D investment even during the years of economic and financial crisis. Lastly, the study also indicates that firms make a complementary use of capital expenditures and R&D intensity for their R&D investment growth strategies and it reveals that there are differences in their use between firms' age classes across sectors. Overall, the main results of the Thesis suggest that to reach a more positive R&D dynamics and boost its competitiveness, the EU should adapt its industrial structure and increase the weight of high R&D intensive sectors. A focus on creating the conditions for firm creation and growth in new-emerging innovative sectors is advised together with favouring the exploitation of the full capacity of EU leading - but mature - sectors to also absorb high-technology from other sectors.

Suggested Citation

  • Pietro Moncada Paternò Castello, 2017. "Evolution of EU corporate R&D in the global economy: intensity gap, sectors' dynamics, specialisation and growth," ULB Institutional Repository 2013/258776, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:ulb:ulbeco:2013/258776
    Note: Degree: Doctorat en Sciences économiques et de gestion
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    Cited by:

    1. Pietro Moncada-Paternò-Castello & Sara Amoroso & Michele Cincera, 0. "Corporate R&D intensity decomposition: different data, different results?," Science and Public Policy, Oxford University Press, vol. 47(4), pages 458-473.
    2. Pietro Moncada-Paternò-Castello & Nicola Grassano, 2022. "The EU vs US corporate R&D intensity gap: investigating key sectors and firms [A primer on innovation and growth]," Industrial and Corporate Change, Oxford University Press, vol. 31(1), pages 19-38.
    3. Petros Gkotsis & Antonio Vezzani, 2019. "Heterogeneity of technology-specific R&D investments. Evidence from top R&D investors worldwide," JRC Working Papers on Corporate R&D and Innovation 2018-04, Joint Research Centre (Seville site).
    4. Pietro Moncada-Paterno-Castello & Hector Hernandez, 2018. "Ten-year evolution of EU industrial R&D in the global context," JRC Research Reports JRC112653, Joint Research Centre (Seville site).

    More about this item

    Keywords

    Corporate R&D intensity decomposition; EU corporate R&D intensity gap; Top world R&D investors; Corporate R&D distribution; Sectors' dynamics; Sector specialisation; Technological specialisation; R&D investment growth; EU industry; EU R&D policy; Literature survey; Empirical analysis;
    All these keywords.

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