R&D EFFICIENCY AND THE NATIONAL INNOVATION SYSTEM: AN INTERNATIONAL COMPARISON USING THE DISTANCE FUNCTION APPROACH

Abstract

This paper applies the distance function approach for stochastic frontier analysis (SFA) to compare research and development (R&D) efficiency across 24 nations during 1998-2005. In this multiple input-output framework, R&D expenditure stock and R&D manpower were inputs, while patents, scientific journal articles, and royalties and licensing fees (RLF) were outputs. Intellectual property rights protection, technological cooperation among business sectors, knowledge transfer between business sectors and higher education institutions, agglomeration of R&D facilities, and involvement of the government sector in R&D activities significantly improve national R&D efficiency.