An international comparison of R&D efficiency of multiple innovative outputs: The role of the national innovation system

Abstract

This paper compares research and development (R&D) efficiency across nations based on various output-oriented R&D efficiency indices that are developed by the data envelopment analysis approach. Empirical results show that nations have similar R&D efficiency in terms of patents and royalties, while their performance for journal publications is quite different. We then investigate how the innovation environment, especially in the national innovation system, affects these output-oriented R&D efficiency indices. R&D intensity, intellectual property rights protection, knowledge stock, and human capital accumulation all have significantly positive effects on efficiency indices. Private sector R&D, funded by either foreign sources or funded and performed by private businesses, plays an important role in improving scores on the output-oriented R&D efficiency index for patents and for royalties and licensing fees. The R&D intensity performed by higher education institutions has a positive effect on the journal-oriented R&D efficiency index.