Industries at the World Technology Frontier: Measuring R&D Efficiency in a Non-Parametric DEA Framework

Jens Schmidt-Ehmcke and Petra Zloczysti
Authors registered in the RePEc Author Service: Jens Jens Schmidt-Sceery (Schmidt-E

No 8579, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper identifies the leading country-industry combinations that define the world technology frontier in manufacturing. Using a unique industry dataset compiled from EU KLEMS and PATSTAT, it explores which countries and industries reveal the most efficient innovation processes. We combine a traditional nonparametric frontier approach with super-efficiency and tests for return to scale properties using bootstrap procedures to derive consistent and robust efficiency estimates. Our analysis of 17 OECD countries and 13 industries between 2000 and 2004 shows that Germany, the United States, and Denmark have the highest R&D efficiency on average in total manufacturing. However, sector-specific efficiency scores reveal substantial variation across countries. The principal industries determining the technology frontier are electrical and optical equipment, machinery, and chemical and mineral products. Our results suggest that in case of limited resources, priority should be given to the industries that promise the largest output for the available amount of investment. Instead of generally increasing the R&D-to-GDP ratio--as suggested in the Lisbon Agenda--policymakers might target future R&D efforts to those industries that are economically important and reveal excellent performance.

Keywords: R&d efficiency; Data envelopment analysis; Manufacturing; Patents; Technology frontier (search for similar items in EconPapers)
JEL-codes: C14 L60 O31 O57 (search for similar items in EconPapers)
Date: 2011-09
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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