Disentangling the R+D shortfall of the EU vis-a-vis the US

Hugo Erken () and Frank van Es
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Hugo Erken: Ministry of Economic Affairs and Erasmus University
Frank van Es: CPB Netherlands Bureau for Economics Policy Analysis

No 2007-107, Jena Economics Research Papers from Friedrich-Schiller-University Jena

Abstract: This paper investigates the causes of the shortfall in private R+D expenditure of the EU compared to the US. It shows that differences in the structure of the two economies play only a minor role in explaining the R+D gap. Instead, the European R+D shortfall is mainly caused by a negative intrinsic effect, meaning that companies within European industries spend less on R+D than their US peers in the same sectors. In addition, this negative intrinsic effect is mainly due to institutional differences between the US and the EU15. Government funding of R+D and the internationalization of R+D provide significant explanation as well.

Keywords: private R+D intensity; internationalization of R+D; economic structure; sector-composition effect; intrinsic effect (search for similar items in EconPapers)
JEL-codes: F23 O32 O38 R39 (search for similar items in EconPapers)
Date: 2007-12-20
New Economics Papers: this item is included in nep-eec, nep-ino, nep-ipr, nep-pr~ and nep-tid
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:jrp:jrpwrp:2007-107

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