Corporate R&D and firm efficiency: Evidence from Europe´s top R&D investors

Subal Kumbhakar, Raquel Ortega-Argiles, Lesley Potters, Marco Vivarelli () and Peter Voigt

No 2010-11, JRC Working Papers on Corporate R&D and Innovation from Joint Research Centre

Abstract: The main objective of this study is to investigate the impact of corporate R&D activities on firm performance, measured by labour productivity. To this end, the stochastic frontier technique is used on a unique unbalanced longitudinal dataset on top European R&D investors over the period 20002005. The study quantifies technical inefficiency of individual firms. From a policy perspective, the results of this study suggest that if the aim is to leverage firms productivity emphasis should be put on supporting corporate R&D in high-tech sectors and, to some ex-tent, in medium-tech sectors. On the other hand, corporate R&D in the low-tech sector is found to have a minor effect in explaining productivity. Instead, encouraging investment in fixed assets appears important for the productivity of low-tech industries. Hence, the allocation of support for corporate R&D seems to be as important as its overall increase and an erga omnes approach across all sectors appears inappropriate. However, with regard to technical efficiency, R&D intensity is found to be a pivotal factor in explaining firm efficiency. This is true for all industries.

Keywords: Corporate R&D; productivity; technical efficiency; stochastic frontier analysis (search for similar items in EconPapers)
JEL-codes: L2 O3 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2010-12
New Economics Papers: this item is included in nep-cfn, nep-eff, nep-eur, nep-ind, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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https://publications.jrc.ec.europa.eu/repository/handle/JRC62369 (application/pdf)

Related works:
Journal Article: Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors (2012)
Working Paper: Corporate R&D and Firm Efficiency: Evidence from Europe’s Top R&D Investors (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ipt:wpaper:201011

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