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Effects of R&D spending on Innovation by Irish and Foreign-owned Businesses

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  • Doran, Justin
  • Jordan, Declan
  • O'Leary, Eoin

Abstract

This paper estimates the private returns to four different kinds of R&D spending on the probability of Irish and foreign-owned businesses engaging in product, process and organizational innovation. By providing econometric analysis of nearly 2000 businesses in the Community Innovation Survey: 2004 to 2006, it makes an important contribution to our understanding of the effects of Irish innovation policy, which has incentivized businesses to spend on R&D in Ireland. The main findings are that Irish owned businesses are significantly more likely than foreign-owned to introduce new products as a result of creative R&D work undertaken. Foreign-owned businesses, which spend nearly 6 times more per worker on R&D than Irish-owned, enjoy very high returns mostly from the purchase or licence of patents. This reflects a fundamental difference in the innovation activities of these businesses, which is critical for policymakers’ understanding of the Irish innovation system.

Suggested Citation

  • Doran, Justin & Jordan, Declan & O'Leary, Eoin, 2013. "Effects of R&D spending on Innovation by Irish and Foreign-owned Businesses," MPRA Paper 44579, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44579
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    References listed on IDEAS

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    Cited by:

    1. O’Leary Eoin, 2018. "Planning Ireland to 2040: How to address our economic development policy weaknesses," Administration, Sciendo, vol. 66(1), pages 89-105, February.
    2. Doran Justin & Ryan Geraldine, 2017. "The role of stimulating employees’ creativity and idea generation in encouraging innovation behaviour in Irish firms," The Irish Journal of Management, Sciendo, vol. 36(1), pages 32-48.
    3. Justin Doran & Eoin O'Leary, 2016. "The Innovation Performance of Irish and Foreign-owned Firms: The Roles of R&D and Networking," The World Economy, Wiley Blackwell, vol. 39(9), pages 1384-1398, September.
    4. Doran, Justin & O'Leary, Eoin, 2013. "The Roles of R&D and networking for innovation by Irish and foreign-owned firms: evidence from the Irish CIS 2006-08," MPRA Paper 47291, University Library of Munich, Germany.
    5. Declan Jordan & Peter Fako, 2018. "RIO Country Report 2017: Ireland," JRC Research Reports JRC111329, Joint Research Centre.

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    More about this item

    Keywords

    Innovation Policy; Innovation Output; Research & Development;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • R19 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Other

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