IDEAS home Printed from https://ideas.repec.org/a/kap/jtecht/v43y2018i1d10.1007_s10961-015-9454-3.html
   My bibliography  Save this article

Does research and development expenditure impact innovation? theory, policy and practice insights from the Greek experience

Author

Listed:
  • Ioannis Voutsinas

    (Bank of Greece)

  • Constantinos Tsamadias

    (Harokopio University)

  • Elias Carayannis

    (George Washington University)

  • Christos Staikouras

    (Athens University of Economics and Business)

Abstract

This study empirically investigates the causal relationship between research and development (R&D) expenditure and innovation in Greece, during the period 1981–2009. It uses time series analysis, the theoretical background of the endogenous knowledge-based growth theories and the annual number of patent applications to the European Patent Organization as proxy of innovation activity. The Johansen method is applied to examine the possibility of co-integration. The results confirm the presence of a long-run relationship between R&D expenditure and innovation. The total and private R&D expenditure appear to have a positive effect on total and business innovation. In addition, the public R&D expenditure has a positive influence on business and total innovation, which indicates the existence of significant externalities of public sector research. The long-run elasticity of innovation with respect to R&D expenditure is estimated to be, on average, 1.9. Implications for public policies and related practices are formulated.

Suggested Citation

  • Ioannis Voutsinas & Constantinos Tsamadias & Elias Carayannis & Christos Staikouras, 2018. "Does research and development expenditure impact innovation? theory, policy and practice insights from the Greek experience," The Journal of Technology Transfer, Springer, vol. 43(1), pages 159-171, February.
    • Handle: RePEc:kap:jtecht:v:43:y:2018:i:1:d:10.1007_s10961-015-9454-3
    DOI: 10.1007/s10961-015-9454-3
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10961-015-9454-3
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10961-015-9454-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. A. Bellucci & L. Pennacchio, 2016. "University knowledge and firm innovation: evidence from European countries," The Journal of Technology Transfer, Springer, vol. 41(4), pages 730-752, August.
    2. Teixeira, Aurora A.C. & Fortuna, Natércia, 2010. "Human capital, R&D, trade, and long-run productivity. Testing the technological absorption hypothesis for the Portuguese economy, 1960-2001," Research Policy, Elsevier, vol. 39(3), pages 335-350, April.
    3. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
    4. Laura Bottazzi & Giovanni Peri, 2007. "The International Dynamics of R&D and Innovation in the Long Run and in The Short Run," Economic Journal, Royal Economic Society, vol. 117(518), pages 486-511, March.
    5. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-351, March.
    6. Beñat Bilbao‐Osorio & Andrés Rodríguez‐Pose, 2004. "From R&D to Innovation and Economic Growth in the EU," Growth and Change, Wiley Blackwell, vol. 35(4), pages 434-455, September.
    7. Guerrero, Maribel & Cunningham, James A. & Urbano, David, 2015. "Economic impact of entrepreneurial universities’ activities: An exploratory study of the United Kingdom," Research Policy, Elsevier, vol. 44(3), pages 748-764.
    8. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
    9. Panagiotis Pegkas & Constantinos Tsamadias, 2014. "Does Higher Education Affect Economic Growth? The Case of Greece," International Economic Journal, Taylor & Francis Journals, vol. 28(3), pages 425-444, September.
    10. Granger, C W J, 1969. "Investigating Causal Relations by Econometric Models and Cross-Spectral Methods," Econometrica, Econometric Society, vol. 37(3), pages 424-438, July.
    11. Gaetan de Rassenfosse & Bruno van Pottelsberghe de la Potterie, 2012. "On the Price Elasticity of Demand for Patents," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(1), pages 58-77, February.
    12. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    13. Ioannis Voutsinas & Constantinos Tsamadias, 2014. "Does research and development capital affect total factor productivity? Evidence from Greece," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(7), pages 631-651, October.
    14. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    15. Coe, David T. & Helpman, Elhanan & Hoffmaister, Alexander W., 2009. "International R&D spillovers and institutions," European Economic Review, Elsevier, vol. 53(7), pages 723-741, October.
    16. Klette, Tor Jakob & Moen, Jarle & Griliches, Zvi, 2000. "Do subsidies to commercial R&D reduce market failures? Microeconometric evaluation studies1," Research Policy, Elsevier, vol. 29(4-5), pages 471-495, April.
    17. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    18. Michael E. Porter & Scott Stern, 2000. "Measuring the "Ideas" Production Function: Evidence from International Patent Output," NBER Working Papers 7891, National Bureau of Economic Research, Inc.
    19. Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501.
    20. E. Carayannis & E. Grigoroudis, 2014. "Linking innovation, productivity, and competitiveness: implications for policy and practice," The Journal of Technology Transfer, Springer, vol. 39(2), pages 199-218, April.
    21. Elias Carayannis & Ruslan Rakhmatullin, 2014. "The Quadruple/Quintuple Innovation Helixes and Smart Specialisation Strategies for Sustainable and Inclusive Growth in Europe and Beyond," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(2), pages 212-239, June.
    22. Jones, Charles I, 1995. "R&D-Based Models of Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 103(4), pages 759-784, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:zna:indecs:v:19:y:2021:i:4:p:168-188 is not listed on IDEAS
    2. Zhang, Weike & Luo, Qian & Zhang, Yufeng & Yu, Ao, 2023. "Does green credit policy matter for corporate exploratory innovation? Evidence from Chinese enterprises," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 820-834.
    3. Joaquín M. Azagra-Caro & Laura González-Salmerón & Pedro Marques, 2021. "Fiction lagging behind or non-fiction defending the indefensible? University–industry (et al.) interaction in science fiction," The Journal of Technology Transfer, Springer, vol. 46(6), pages 1889-1916, December.
    4. Dorota Korenkiewicz & Wolfgang Maennig, 2023. "Women on a Corporate Board of Directors and Consumer Satisfaction," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(4), pages 3904-3928, December.
    5. Pegkas, Panagiotis & Staikouras, Christos & Tsamadias, Constantinos, 2019. "Does research and development expenditure impact innovation? Evidence from the European Union countries," Journal of Policy Modeling, Elsevier, vol. 41(5), pages 1005-1025.
    6. Benzaim, Samia & Ftiti, Zied & Khedhaouria, Anis & Djermane, Rebai, 2023. "US foreign investments: Technology transfer, relative backwardness, and the productivity growth of host countries," The Quarterly Review of Economics and Finance, Elsevier, vol. 87(C), pages 275-295.
    7. Ján Huòady & Peter Pisár, 2021. "Innovation and invention in the EU business sector: the role of the R&D expenditures," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 19(2), pages 168-188.
    8. Kamil Decyk, 2024. "Innovative Activity of the Service Sector of the EU Member States," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 6969-6994, June.
    9. Wen, Jun & Wang, Siqin & Yang, Xiuyun & Zhou, Xiaozhou, 2023. "Impacts of epidemics on innovation: An empirical analysis," Technovation, Elsevier, vol. 119(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pegkas, Panagiotis & Staikouras, Christos & Tsamadias, Constantinos, 2019. "Does research and development expenditure impact innovation? Evidence from the European Union countries," Journal of Policy Modeling, Elsevier, vol. 41(5), pages 1005-1025.
    2. Neves, Pedro Cunha & Sequeira, Tiago Neves, 2018. "Spillovers in the production of knowledge: A meta-regression analysis," Research Policy, Elsevier, vol. 47(4), pages 750-767.
    3. Sharif, Naubahar & Chandra, Kevin & Mansoor, Athar & Sinha, Kirti Bhasin, 2021. "A comparative analysis of research and development spending and total factor productivity growth in Hong Kong, Shenzhen, Singapore," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 108-120.
    4. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 3, pages 1-72.
    5. Bettina Becker, 2013. "The Determinants of R&D Investment: A Survey of the Empirical Research," Discussion Paper Series 2013_09, Department of Economics, Loughborough University, revised Sep 2013.
    6. Francesco Di Comite & D'Artis Kancs & Wouter Torfs, 2015. "Macroeconomic Modelling of R&D and Innovation Policies," JRC Research Reports JRC89558, Joint Research Centre.
    7. A. Minniti & F. Venturini, 2014. "R&D Policy and Schumpeterian Growth: Theory and Evidence," Working Papers wp945, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Zoltán Lakner & Anna Kiss & József Popp & Zoltán Zéman & Domicián Máté & Judit Oláh, 2019. "From Basic Research to Competitiveness: An Econometric Analysis of the Global Pharmaceutical Sector," Sustainability, MDPI, vol. 11(11), pages 1-17, June.
    9. Ramona Dumitriu & Razvan Stefanescu, 2015. "The Relationship Between Romanian Exports And Economic Growth After The Adhesion To European Union," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 17-26.
    10. Abo-Zaid Salem M, 2011. "The Trade-Growth Relationship in Israel Revisited: Evidence from Annual Data, 1960-2004," Review of Middle East Economics and Finance, De Gruyter, vol. 6(3), pages 63-93, February.
    11. Walid M.A. Ahmed, 2012. "On the interdependence structure of market sector indices: the case of Qatar Exchange," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 11(4), pages 468-488, October.
    12. Bravo-Ortega, Claudio & García Marín, Álvaro, 2011. "R&D and Productivity: A Two Way Avenue?," World Development, Elsevier, vol. 39(7), pages 1090-1107, July.
    13. Dellis, Konstantinos, 2020. "Knowledge diffusion and financial development thresholds," LSE Research Online Documents on Economics 107882, London School of Economics and Political Science, LSE Library.
    14. Xiong, Ailun & Xia, Senmao & Ye, Zhen Peter & Cao, Dongmei & Jing, Yanguo & Li, Hongyi, 2020. "Can innovation really bring economic growth? The role of social filter in China," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 50-61.
    15. Sahoo, Auro Kumar & Sahoo, Dukhabandhu & Sahu, Naresh Chandra, 2014. "Mining export, industrial production and economic growth: A cointegration and causality analysis for India," Resources Policy, Elsevier, vol. 42(C), pages 27-34.
    16. Kalaitzi, Athanasia Stylianou & Chamberlain, Trevor William, 2021. "The validity of the export-led growth hypothesis: some evidence from the GCC," LSE Research Online Documents on Economics 106586, London School of Economics and Political Science, LSE Library.
    17. Mohammad Jaforullah & Alan King, 2015. "is New Zealand's economy vulnerable to world oil market shocks?," Working Papers 1503, University of Otago, Department of Economics, revised Mar 2015.
    18. Banerjee, Rajabrata & Gupta, Kartick, 2021. "Do country or firm-specific factors matter more to R&D spending in firms?," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 75-95.
    19. Alexandre Almeida & Aurora A.C. Teixeira, 2007. "Does Patenting negatively impact on R&D investment?An international panel data assessment," FEP Working Papers 255, Universidade do Porto, Faculdade de Economia do Porto.
    20. James B. Ang & Jakob B. Madsen, 2012. "Risk capital, private credit, and innovative production," Canadian Journal of Economics, Canadian Economics Association, vol. 45(4), pages 1608-1639, November.

    More about this item

    Keywords

    Expenditure; Research and development; Innovation; Public policy; Greece;
    All these keywords.

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jtecht:v:43:y:2018:i:1:d:10.1007_s10961-015-9454-3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.