Creating Innovations, Productivity and Growth - the efficiency of Icelandic firms

Ho, Dong-huyn () and Hans Lööf ()
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Ho, Dong-huyn: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden

No 162, Working Paper Series in Economics and Institutions of Innovation from Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

Abstract: Iceland is one of the smallest European economies and the country was hit severely by the 2008-financial crisis. This paper considers the economy in the period preceding the collapse. Applying a Data Envelopment Analysis on 204 randomly selected firms, the results suggest that a substantial fraction of the Icelandic firms can be classified as non-efficient in their production process. The production scale of many manufacturing firms is too small to be technically efficient, while service firms typically use excessive resources in their production process. A remarkably weak performance in transforming R&D and labour efforts into successful innovations is observed.

Keywords: Technical efficiency; R&D; Innovation; Productivity (search for similar items in EconPapers)
JEL-codes: C14 D24 O14 O33 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ino, nep-ipr and nep-mic
Date: 2009-01-15
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:cesisp:0162

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