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The path of R&D efficiency over time

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  • Beneito, Pilar
  • Rochina-Barrachina, María Engracia
  • Sanchis, Amparo

Abstract

In this paper we investigate the pattern of R&D efficiency in terms of the number of product innovations achieved by firms over time. Using a panel dataset of Spanish manufacturing firms for the period 1990–2006, we follow the innovative performance of R&D active firms and observe that innovation rates change over firms' R&D histories. To explain these facts we propose a model that explicitly acknowledges the twofold composition of firms' R&D expenditures, comprising spending on both physical capital for R&D projects and payments to researchers. We regard this latter component of R&D as a source for dynamic returns to firms' R&D investments. Consequently firms' innovation outcomes clearly depend on how long they have been investing in R&D and also on whether there have been any interruptions in the temporal sequence of R&D activities. Our results suggest that R&D activities exhibit dynamic returns that are positive but at a decreasing rate, and that interruptions in R&D engagement reduce R&D efficiency.

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  • Beneito, Pilar & Rochina-Barrachina, María Engracia & Sanchis, Amparo, 2015. "The path of R&D efficiency over time," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 57-69.
    • Handle: RePEc:eee:indorg:v:42:y:2015:i:c:p:57-69
    DOI: 10.1016/j.ijindorg.2015.07.001
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    Cited by:

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    2. Yongqi Feng & Haolin Zhang & Yung-ho Chiu & Tzu-Han Chang, 2021. "Innovation efficiency and the impact of the institutional quality: a cross-country analysis using the two-stage meta-frontier dynamic network DEA model," Scientometrics, Springer;Akadémiai Kiadó, vol. 126(4), pages 3091-3129, April.
    3. Labeaga, José M. & Martínez-Ros, Ester & Sanchis, Amparo & Sanchis, Juan A., 2021. "Does persistence in using R&D tax credits help to achieve product innovations?," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    4. Mañez, J.A. & Love, J.H., 2020. "Quantifying sunk costs and learning effects in R&D persistence," Research Policy, Elsevier, vol. 49(7).
    5. Tan, Xiujie & Liu, Yishuang & Dong, Hanmin & Zhang, Zhan, 2022. "The effect of carbon emission trading scheme on energy efficiency: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 506-517.
    6. Martina Halaskova & Beata Gavurova & Kristina Kocisova, 2020. "Research and Development Efficiency in Public and Private Sectors: An Empirical Analysis of EU Countries by Using DEA Methodology," Sustainability, MDPI, vol. 12(17), pages 1-22, August.
    7. García-Vega, María, 2022. "R&D restructuring during the Great Recession and young firms," International Journal of Industrial Organization, Elsevier, vol. 81(C).
    8. María García-Vega, 2020. "R&D restructuring during the Great Recession and young firms," Discussion Papers 2020-09, University of Nottingham, GEP.

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    More about this item

    Keywords

    R&D; Product innovation; Dynamic returns; Interruptions in R&D; Forgetting; Count data;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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