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Innovation and invention in the EU business sector: the role of the R&D expenditures

Author

Listed:
  • Ján Huòady

    (Matej Bel University in Banska Bystrica, Faculty of Economics, Banská Bystrica, Slovakia)

  • Peter Pisár

    (Matej Bel University in Banska Bystrica, Faculty of Economics, Banská Bystrica, Slovakia)

Abstract

The article deals with the problems of business innovation and inventions in the EU countries with a focus on the potential effects of business R&D expenditure. Since the business is considered an essential sector concerning innovation, business R&D expenditure can play a significant role in their creation. However, several obstacles hinder the successful transformation of R&D expenditures into invention or innovation. R&D expenditures as any other type of business investments are associated with a certain risk. In this case, the risk of failure can be even higher due to their long-term nature and complexity. The article aims at an examination of the short-run and long-run relationship between business R&D expenditure, on one hand, an invention, and innovation on the other. To achieve this, the tests of Granger causalities and panel cointegrated regression has been applied on macro-level data. Furthermore, the structure of R&D expenditure in EU countries has been also examined. The results suggest a positive correlation between business R&D expenditure and innovation activities as well as the positive causal effect of business R&D expenditure on patenting in the long run.

Suggested Citation

  • 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.
    • Handle: RePEc:zna:indecs:v:19:y:2021:i:2:p:168-188
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    More about this item

    Keywords

    innovation; business R&D expenditure; invention; business innovation; patenting;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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