Business Cycles and Investment in Productivity-Enhancing Activities: Evidence from Spanish Firms

This paper tests the opportunity-cost theory on the long-run effects of business cycles using a panel of Spanish firms during the period 1991–2010. Under this theory, the share of productivity-enhancing activities (PEAs), such as R&D investment or on-the-job training, relative to production activities should increase during downturns because of the fall in their relative cost — in terms of forgone output. This would imply that business cycles may have a (positive) long-term impact on firms' productivity growth. In the spirit of Aghion et al. (2008), we allow the impact of the cycle on PEA to vary between firms with different access to external funding. We find that, in accordance with the opportunity-cost approach, the share of R&D investment and training expenditures on total investment outlays follow a countercyclical pattern, which in the case of R&D may be reversed by the presence of credit constraints. However, the share of investment in other non-R&D-related intangible investments is found to be acyclical, which could suggest some kind of substitution across different PEAs over the cycle.     

A comparison of the scientific performance of the U.S. and the European union at the turn of the 21st century

In this paper, scientific performance is identified with the impact that journal articles have through the citations they receive. In 15 disciplines, as well as in all sciences as a whole, the EU share of total publications is greater than that of the U.S. However, as soon as the citations received by these publications are taken into account the picture is completely reversed. Firstly, the EU share of total citations is still greater than the U.S. in only seven fields. Secondly, the mean citation rate in the U.S. is greater than in the EU in every one of the 22 fields studied. Thirdly, since standard indicators—such as normalized mean citation ratios—are silent about what takes place in different parts of the citation distribution, this paper compares the publication shares of the U.S. and the EU at every percentile of the world citation distribution in each field. It is found that in seven fields the initial gap between the U.S. and the EU widens as we advance towards the more cited articles, while in the remaining 15 fields—except for Agricultural Sciences—the U.S. always surpasses the EU when it counts, namely, at the upper tail of citation distributions. Finally, for all sciences as a whole the U.S. publication share becomes greater than that of the EU for the top 50% of the most highly cited articles. The data used refers to 3.6 million articles published in 1998–2002, and the more than 47 million citations they received in 1998–2007.     

Increasing the return on investment from federally-funded research and development

Abstract

Each year, the United States invests approximately $495 billion in research and development (R&D) – about a quarter of the total global investment. While the private sector accounts for about 67% of U.S. investment, the Federal government plays a critical role in funding R&D, particularly in areas that address societal needs in which the private sector does not yet have sufficient clear or strong incentive to make the required investments. The Federal government invests approximately $150 billion each year in R&D conducted at Federal laboratories, universities and other research organizations. As Federal R&D investments wind down or are completed, additional work is often still needed to translate the knowledge accrued from that R&D into products and services that will improve lives and provide economic growth. Technology transfer is the process by which existing knowledge, facilities or capabilities developed through R&D are utilised to fulfill public and private need. The transfer of technology from federally-funded R&D to the private sector is crucial to realising the taxpayer’s return on investment in the Federal R&D ecosystem. However, moving innovations from the lab to the market is more than inventing products for people to buy. Technology transfer is about creating jobs and growing the economy; ensuring a strong, secure, and resilient Nation; and improving Americans’ health and environment, fostering the conditions for America to maintain leadership in global innovation.     

Using patents and publications to assess R&D efficiency in the states of the USA

Even with the USA spending the largest amounts in R&D, its share in total patent grants worldwide has been declining. This decline is also evident in its share of world scientific publications. These developments have been termed by some as the “American Paradox”. Extant research on R&D efficiency and technological innovation capability has considered the USA as a homogeneous entity and has not focused at the sub-national level. This paper analyses the R&D efficiency of 50 US states and the District of Columbia. R&D efficiency is calculated as the ratio of patents granted and scientific publications to R&D expenditures. Only 14 states out of the 51 regions are found to exhibit positive changes in R&D efficiency between 2004 and 2008. Comparing this performance with that of the BRICS nations over the same period we find that Brazil, India, China and South Korea show significant improvements in R&D efficiency with India taking the lead. This research identifies the states in the US with the highest R&D efficiency and presents benchmarks which can be followed by policy interventions. The paper highlights the importance of conducting analyses of R&D efficiency using patents and publications at the sub-national level for informed policy making.     

International scientific and technological collaboration of China from 2004 to 2008: a perspective from paper and patent analysis

Since China adopted Open-Up and Reformed Policy for global collaboration, China’s science and technology have experienced an astounding growth. Papers and patents encompass valuable scientific and technological (S&T) information and collaborative efforts. This article studies China’s international S&T collaboration from the perspective of paper and patent analysis. The results show that China’s total papers and patents have continuously increased from 2004 to 2008, the papers and patents resulting from China’s international collaboration also present a steady growth. However, there is a decline in the share of international collaboration papers and patents with a certain range due to the rapid independent R&D. China’s international scientific collaboration (ISC) is broadly distributed over many countries, the USA being the most important ISC partners. China’s international technological collaboration (ITC) is mainly carried out with USA and Taiwan, and Taiwan has been the most significant ITC partner of when taking countries’ patent output into account. Besides, ISC shows a continuous raise of Chinese papers’ citation. Even the countries with a small amount of papers and ISC with China, exert a positive influence on the impact of citation of Chinese papers as well. However, ITC does not always play an active role in the improvement of citation impact of Chinese patents.     

Is the United States losing ground in science? A global perspective on the world science system

Based on the Science Citation Index-Expanded web-version, the USA is still by far the strongest nation in terms of scientific performance. Its relative decline in percentage share of publications is largely due to the emergence of China and other Asian nations. In 2006, China has become the second largest nation in terms of the number of publications within this database. In terms of citations, the competitive advantage of the American “domestic market” is diminished, while the European Union (EU) is profiting more from the enlargement of the database over time than the USA. However, the USA is still outperforming all other countries in terms of highly cited papers and citation/publication ratios, and it is more successful than the EU in coordinating its research efforts in strategic priority areas like nanotechnology. In this field, the People’s Republic of China (PRC) has become second largest nation in both numbers of papers published and citations behind the USA.     

How to interpret the position of private sector institutions in bibliometric rankings of research institutions

This paper analyzes the positions of institutions from the private domain in bibliometric rankings of as many as 27,000 research institutions and highlights factors that are crucial for a proper interpretation of such positions. It was found that among the institutions with the largest output in terms of published research articles, private firms are underrepresented, whereas in the top quartile of institutions with the largest citation impact firms are overrepresented. A firm’s publication output is not a good indicator of its R&D investment: big firms in Pharmaceutics are both heavy investors in R&D and frequent publishers of scientific articles, whereas in Automobiles firms tend to invest heavily in R&D but their publication output is low. This is ascribed to the fact that the former need a validation of their results by the scientific community, while the latter do less so. Private institutions generating the largest citation impact tend to collaborate with the best public research institutions. This reflects the crucial importance of publicly funded research for the private sector.     

Do new SCI journals have a different national bias?

National shares of worldwide publications in the Science Citation Index (SCI) have shifted recently. The long-term decline in U.S. share accelerated in the mid-1990s, and now the EU has joined this decline. Not coincidentally, the shares of some countries have increased sharply, particularly those of China, S. Korea, Taiwan, and Singapore. Since the SCI constantly adds new journals, one reason might be that newly added journals were more favorable to them. To test this, the database was partitioned into “old journals” (added before 1995) and “new journals,” added afterward. The analysis was done for eight of the 20 fields of science defined by the National Science Indicator CD. In some fields, new journals were indeed much more favorable to the Asians. In some fields, however, new journals were actually more favorable to the U.S. In aggregate over the eight fields analyzed, the size of this effect was too small to account for much of the sharp changes in national shares. Furthermore tests between old and new journals find that differences in most fields are not statistically significant. The results provide evidence that the SCI can be used to accurately track national publication changes over time.     

Fusion of technology management and financing management - Amazon's transformative endeavor by orchestrating techno-financing systems

Amazon became the world R&D leader in 2017 by rapidly increasing R&D investment. Its R&D investment in 2017 was double that of 2015, 5 times that of 2012, and 10 times that of 2011. This rapid increase continued in 2018, and Amazon accomplished a skyrocketing increase in its market capitalization, closing to being the world's biggest company.Such a rapid increase in R&D and subsequent market value has raised questions about how to conduct R&D and secure a large amount of funds needed for high-risk investments. Amazon has provided hypothetical answers to both of these questions.Amazon has been conducting innovative R&D to transform routine or periodic alterations into significant improvements during the R&D process and claiming huge expenses for such transformation activities as expenses for R&D.The company's ample free cash flow generated by sophisticated cash conversion cycle (CCC) management endorsed a large amount of investment for such a high-risk strategy.Increased R&D induced business advancement and lean cost structure construction leading to a further increase in cash flow has stimulated interactions between vendors, customers, and Amazon via the Amazon marketplace. Activated interaction-accelerated CCC advancement, a subsequent free cash flow increase, and user-driven innovation have thus simultaneously accelerated R&D transformation.All of these components - R&D transformation and technopreneurial strategy consisting of technology management, as well as marketplace development and CCC-driven cash flow generation consisting of financing management - function together as a consolidated sophisticated machine. Thus, Amazon has succeeded in fusing technology management and financing management by orchestrating all techno-financing systems.In light of increasing concerns regarding R&D expansion without the dilemma of a productivity decline that most digital economies are now confronting, this paper demonstrates the above hypothetical answers.Following the authors' preceding analysis of Amazon's unique technology management toward a new concept of R&D in the digital economy, an intensive empirical analysis focusing on the development trajectory of Amazon's techno-financing system over the last two decades was conducted.An insightful suggestion as to neo-open innovation that fuses technology management and financing management is thus provided.     

R&;D market value under weak intellectual property rights protection: the case of India

The relationship between R&D and market value has attracted the interest of many scholars within different fields, but scant attention has been paid to the countries with weak protection of intellectual property rights (IPR). This is unfortunate, since this problem is potentially highly relevant for IPR policy in developing countries. In particular, several questions arise when the problem of R&D market value is analyzed in a country where IPR protection is weak. First, there are concerns regarding incentives (i.e., private returns) for firms to invest in R&D when IPR is only weakly protected. Second, significant differences could emerge in the market valuation of R&D investments of domestic and foreign firms, above all in those industries where spillovers are more likely. To examine these issues, this paper investigates the market valuation of R&D investments of a panel of 219 R&D-reporting domestic and foreign firms publicly traded in India with an empirical analysis. First, the market valuation of the R&D capital for the whole sample is positive and higher than those obtained in U.S. or European countries from similar analyses. Second, in the sub-samples of the domestic and foreign firms, the market value of R&D investments of foreign firms is not significantly different from zero, while the valuation coefficient of domestic firms is four times higher than that obtained on the whole sample. Third, in science-based industries the difference between domestic and foreign firms is smaller than in the other industries. The policy implications of these findings are discussed.     

The Albuquerque model and efficiency indicators in national scientific productivity with respect to manpower and funding in science

Due to recession in the world economy there is a trend towards a reduction in growth of R&D expenditure in the G7 countries. At the same time countries like China and Korea are investing more in scientific research. We compare the differences in the inputs to science for different countries and explore the level of efficiency in the output of scientific papers with respect to inputs such as manpower and investment. We find that the EU countries are relatively more efficient than Japan, the USA and also China and Korea so far as the production of papers is concerned. However, if efficiency is considered in terms of patents, Japan Korea and the USA are ahead. We compare our results with Albuquerque’s model linking patent to paper ratios and development, and find significant deviations for some countries. We deduce that there has been a shift from publishing towards patenting in certain countries and link it to high contribution from the business sector to R&D expenditure. Preliminary results of this analysis have been presented in Basu (In Proceedings of the 14th International Society for Scientometrics and Informetrics (ISSI) Conference, 2013).     

Regional analysis on Chinese scientific output

Based on data from the Science Citation Index Expanded (SCIE) and using scientometric methods, we conducted a systematic analysis of Chinese regional contributions and international collaboration in terms of scientific publications, publication activity, and citation impact. We found that regional contributions are highly skewed. The top positions measured by number of publications or citations, share of publications or citations are taken by almost the same set of regions. But this is not the case when indicators for relative citation impact are used. Comparison between regional scientific output and R&D expenditure shows that Spearman’s rank correlation coefficient between the two indicators is rather low among the leading publication regions.     

Mapping of dental science research in India: a scientometric analysis of India’s research output, 1999–2008

The study examines India’s performance based on its publication output in dental sciences during 1999–2008, based on several parameters, including the country annual average growth rate, global publication share & rank among 25 most productive countries of the world, national publication output and impact in terms of average citations per paper, international collaboration output and share and contribution of major collaborative partners, contribution and impact of select top 25 Indian institutions and select top 15 most productive authors, patterns of communication in national and international journals and characteristics of its 45 high cited papers. The study uses 10 years (1999–2008) publications data in dental sciences of India and other countries drawn from Scopus international multidisciplinary bibliographical database.     

Optimal R&D investments of the firm

This paper examines irreversible decisions on innovative activities where it takes time to complete an R&D project. The total amount of R&D investments that the firm needs to undertake in order to obtain the breakthrough in the innovation process is uncertain. R&D investments are limited by the restriction that they must be self-financed. It is shown that R&D investments are more valuable when the level of uncertainty is large. Especially, it is very attractive to undertake R&D investments if a project faces many uncertainties during its early phases. Furthermore we study how R&D behavior is influenced by different levels of the discount rate and the financing limit. Moreover, the effects of R&D subsidies, spillover benefits and a payoff that decreases over time are analyzed. Received: 9 October 1997 / Accepted: 19 March 1998     

Status of physics research in India: An analysis of research output during 1993–2001

The paper reviews the present status of Indian physics research, in particular its nature of research system, nature of institutions involved, type of education offered and outturn at postgraduate and Ph.D level, the extent to which extra-mural funding support is available from various governmental R&D agencies, and the nature of professional organizations involved. The study is based on analysis of Indian physics output, as indexed in Expanded Science Citation Index (Web of Science) during 1993–2001. The study also discusses various features of Indian physics research such as its growth in terms of research papers, institutional publication productivity, nature of collaboration, and the quality and impact of its research output.     

Science and technology policy in Turkey. National strategies for innovation and change during the 1983-2003 period and beyond

Summary An evaluation of Turkey's science and technology (S & T) policy in the last two decades has been made by using various indicators of S & T and technological innovation. National trends in inputs for research and development (R & D) activities, publication output and patent data have been studied for the implications of the S & T policy from 1983 to 2003. Some of the findings on the outcomes of policy measures in terms of inputs to R & D and publication output are as follows: (1) Total R & D expenditure, as percent of gross domestic product (GDP), increased from 0.32% in 1990 to 0.67% in 2002, (2) the fraction of R & D in the total expenditure for technological innovation increased from 6.6% in 1995-1997 to 29.2% in 1998-2000, and (3) the number of papers in the journals covered in the Science Citation Index (SCI) of the Institute for Scientific Information (ISI) increased from 464 in 1983 to 12160 in 2003 - a more than 26-fold increase in the last two decades.     

Bibliometric analysis of the Czech research publications from 1994 to 2005

We have compared bibliometric data of Czech research papers generated from 1994 to 2005 with papers from six other EU countries: Austria, Hungary, Poland, Finland, Ireland and Greece. The Czech Republic ranked the fifth in number of papers per thousand inhabitants and the sixth in number of citations/paper. Relatively the most cited were Czech papers from fields Engineering and Mathematics ranking the third, and Computer Science, Environment/Ecology and Molecular Biology ranking the fourth among 7 EU countries. Our analysis indicates that Czech research is lagging behind the leading EU countries, but its output is proportional to the R&D expenses.     

The more you spend, the more you get? The effects of R&D and capital expenditures on the patenting activities of biotechnology firms

This paper provides evidence on the mechanisms influencing the patent output of a sample of small and large, entrepreneurial and established biotechnology firms from the input of indirect knowledge acquired from capital expenditures and direct knowledge from in-house R&D. Statistical models of counts are used to analyse the relationship between patent applications and R&D investment and capital expenditures. It focuses on biotechnology in the period 2002–2007 and is based on a unique data set drawn from various sources including the EU Industrial R&D Investment Scoreboard, the European Patent Office (EPO), the US Patent and Trademark Office, and the World Intellectual Property Organisation. The statistical models employed in the paper are Poisson distribution generalisations with the actual distribution of patent counts fitting the negative binomial distribution and gamma distribution very well. Findings support the idea that capital expenditures—taken as equivalent to technical change embodied in new machinery and capital equipment—may also play a crucial role in the development of new patentable items from scientific companies. For EPO patents, this role appears even more important than that played by R&D investment. The overall picture emerging from our analysis of the determinants of patenting in biotechnology is that the innovation process involves a well balanced combination of inputs from both R&D and new machinery and capital equipment.     

Using patent analysis to explore corporate growth

This study applies patent analysis to discuss the influences of the three aspects of patent trait—a firm’s revealed technology advantage in its most important technological field (RTA_MIT), relative patent position in its most important technological field (RPP_MIT), and patent share in its most important technological field (PS_MIT)—upon corporate growth and discusses the moderation effect of relative growth rate of its most important technological field (RGR_MIT) in the American pharmaceutical industry. The results demonstrate that the three relationships between corporate growth and the three aspects of patent trait are positive, and verify that RGR_MIT moderates the three relationships. This study suggests that pharmaceutical companies should enhance their R&D capabilities, the degree of leading position, and concentration of R&D investment in their most important technological fields to increase their growth. Finally, this study classifies the pharmaceutical companies into four types, and provides some suggestions to them.     

Note on R&D expenditures and fixed capital formation

In this paper we deal with the fixed capital nature of the means of production and labour employed in research and development which generate scientific and technological knowledge. We argue that these R&D current expenditures typically have the nature of fixed investments. We then present an empirical analysis which shows that expenditures on industrial R&D are more strongly linked to the formation of fixed capital than to the formation of capital in general. Applying this conclusion to the economics of research and innovation would make it possible to analyse investments in the production of scientific and technological knowledge with a higher degree of clarity and precision.