The Role of Time in Assessing the Economic Effects of R&D

This study investigates the impacts of R&D on firm performance. It extends previous research by constructing alternative stocks of R&D‐Capital that take into account that time plays an important role in assessing the pay‐off of industrial research. The results show that even when we employed R&D‐Capitals that placed more emphasis on the industrial research that had been undertaken 7 years ago, the effects of R&D were very (statistically) significant and relatively high, thereby suggesting that the life of R&D (on average) tends to be long. The results however, vary across organizations depending on both firm size and the technological opportunities that a company faces. It appears that the depreciation rate of R&D investments is higher in the case of technologically sophisticated firms. In contrast, strategic investments in industrial research generate a relatively constant effect on the performance of other firms, supporting the notion that the corresponding returns for such firms decay slowly.     

Firm size and compositions of R&D expenditures: evidence from a panel of R&D performing manufacturing firms

The effect of firm size on diverse compositions of R&D expenditures is analysed in detail using firm-level data on the Korean manufacturing sector. On the grounds that each type of R&D activity differs in terms of salability in disembodied form and growth potential due to innovation, a distinction between product vs. process, and new vs. incremental R&D is made. Empirical tests show that the firm size is significantly associated with both the new and incremental R&D. Moreover, firm size is found to be significantly associated with other types of R&D compositions such as the share of R&D devoted to incremental innovation and multidimensional combinations of product, process, new and incremental R&D. These findings support the idea that large firms possess innovative advantages over smaller firms and firm size is an important determinant for firms’ heterogeneous R&D activities. We also discuss the limitations and the implications of the findings.     

R&D vs. Other Factor Inputs in a High-Tech Industry

According to knowledge-based growth theories, catch-up with the global technology frontier calls for a shift from physical investment to innovation. This prevailing premise in Finland is tested with an unbalanced panel of firms in Finnish information and communications technology (ICT) manufacturing, over a period of rapid growth, 1990–2003. Stochastic frontier model estimation results are overwhelmed by scale elasticity associated productivity growth. Contrary to beliefs, R&D productivity was relatively low, regardless if measured by efficiency impacts of R&D intensity, technical change or R&D elasticity of output. Results are consistent with industry outcomes and reveal internal causes to the subsequent downfall of ICT manufacturing in Finland.     

Public R&D as a Standard-Setting Device

We propose a simple two-firm model with complementarities and imperfect knowledge about the optimal technology. Firms receive two signals about the technology, a public and a private one. We show that with complementarities public signals can serve as a coordination device between firms, even if the private signal is more precise. Our results point to an important function of standard-setting organizations and public R&D: providing a focal point for firms that might not coordinate otherwise.     

Business Group Affiliation and R&D

This paper analyzes whether belonging to a business group enhances firms' propensity for and intensity of R&D based on the greater opportunities to finance and co-ordinate R&D strategies and internalize knowledge spillovers. Compared with the existing literature, this paper has the following novelties: (a) it examines how the organization and diversification of business groups influence the R&D investment of affiliated firms; (b) it analyzes the role of R&D spillovers among affiliated firms; and (c) it distinguishes between propensity for and intensity of R&D. We find that less diversified groups are more likely to centralize R&D, while in more diversified groups firms are more likely to be autonomous. We find that controlled companies are more likely to benefit from knowledge spillovers than firms at the head of the group. Finally, we find that R&D autonomy is significantly associated with both a higher propensity for and intensity of R&D in controlled companies.     

Systemic aspects of R&D policy subsidies for R&D collaborations and their effects on private R&D

This paper analyses how context- and time-dependent factors determine the impact of R&D subsidies on firm behaviour with respect to private R&D expenditures. Based on German R&D survey data, we combine propensity score matching with a difference-in-difference estimator in order to measure the causal influence of public direct R&D project funding on firm behaviour. Our results indicate that (i) repeated participation in R&D projects on average leads to a higher increase in R&D expenditures than once-off funding; (ii) the aggregate effect of R&D funding on R&D expenditures of business firms is somewhat higher for business–business collaboration projects than for science–business collaboration projects; (iii) R&D expenditures of business firms that cooperate with science show a higher share of external R&D spending. Results of one particular cluster programme indicate that at least the short-term development of R&D does not so much depend on which programme direct R&D project funding is applied to.     

The role of firm R&D effort and collaboration as mediating drivers of innovation policy effectiveness

This paper investigates the impact of firm R&D policies supporting R&D investment and collaboration on company innovation performance. Individual and cooperative R&D investments are considered as intermediate outcomes (input and behavioural additionality, respectively) contributing to the final outcome (probability of product innovation). We use a treatment random coefficient model to estimate the policy additionality on a panel data-set merging the third and the fourth wave of the Italian Community Innovation Survey. Results show a significant and positive policy impact on company propensity to product innovation only for the input additionality and for the interaction between the input and the cooperative additionality. This occurs when company cooperation scores overcome a given threshold, in accordance with the assumption that cooperation entails benefits but also coordination costs.     

Determinants of internal and external R&D offshoring: evidence from Spanish firms

This paper analyses the determinants of R&D offshoring of Spanish firms using information from the Panel of Technological Innovation. We find that being an exporter, international technological cooperation, continuous R&D engagement, applying for patents, being a foreign subsidiary, and firm size are factors that positively affect the decision to offshore R&D. In addition, we find that a lack of financing is an obstacle relatively more important for independent firms than for firms that belong to business groups. For these latter, we also obtain that the factors that influence the decision to offshore R&D differ depending on whether the firm purchases the R&D services within the group or through the market: a higher degree of importance assigned to internal sources of information for innovation as compared to market sources increases (decreases) the probability of R&D offshoring only through the group (market).     

R&D,Value Chain Location and Firm Performance in the Global Electronics Industry

In today's global electronics industry, innovation is carried out by various value chain participants, including brand-name manufacturers (sometimes called lead firms), contract manufacturers and component suppliers, but there is little understanding of who benefits most from innovation in such networks. This research examines empirically the relationship of R&D spending and location in the value chain (lead vs. non-lead firms) to firm performance in the global electronics industry by using the Electronic Business 300 data set for 2000–2005. Our results show that firms spending more on R&D have higher gross profits, but do not have higher return on equity (ROE) and return on assets (ROA). There is a strong positive relationship between lead firms and performance as measured by gross profit, ROE and ROA, but the relationship between lead firms and gross profit becomes insignificant when the interaction term of R&D and lead firm is included in the analysis. Finally, lead firm status has a positive interaction effect on the relationship between R&D and gross profit. These findings suggest that the relationship of R&D to performance is mixed, but that lead firms can capture higher value (gross profit) from R&D than contract manufacturers and component suppliers.     

Assessing the Effects of International Trade on Private R&D Expenditures in the Food Processing Sector

This study empirically investigates the effects of imports and exports on private research and development (R&D) expenditures in the food processing sector. An analytical framework discussing the various effects of international trade on R&D activities is presented. This is followed by an empirical analysis that uses a dynamic empirical specification for current R&D expenditures and for a cumulative measure of R&D stock. The empirical investigation is applied to a panel dataset covering Organization for Economic Cooperation and Development's countries. The empirical results show that increases in import intensity levels induce reductions in private R&D expenditures whereas increases in export intensity levels promote larger private R&D expenditures. These outcomes imply that the R&D-enhancing effects of exports are countered by the R&D-reducing effects of imports.     

Forms and Determinants of R&D Collaborations: Evidence Based on French Data

The literature on R&D collaboration highlights a broad set of rationales for allying with other organizations. At the same time, it has been reported that there exists a large variety of forms of collaboration. Nevertheless, the relation between the motives to collaborate and the different forms of collaboration has not been examined. In this paper, we attempt to fill this gap by highlighting and explaining the heterogeneity in the forms of collaboration as a result of several interdependent simultaneous choices. Using a sample of more than 3,000 R&D collaborations, a typology of their characteristics allows us to distinguish five discrete forms of collaboration. Then using a multinomial logit estimation, we show how the forms of collaboration vary according to the firms' attributes (size, R&D internal effort, group membership), market and objectives pursued. We also obtain new results on the effects of incoming spillovers as well as appropriability conditions.     

R&D and Productivity in High-Tech Manufacturing: A Comparison between Italy and Spain

Using data for 12 manufacturing industries over the period 1980–2006, we perform for Italy and Spain a dynamic panel estimation of the long-run elasticity of total factor productivity (TFP) with respect to R&D capital. In spite of recording a level of R&D capital lower than Italian industries, the technology-based industries in Spain have experienced a similar or higher long-run impact on TFP. This is mainly attributable to what occurred from the mid-1990s onwards when, thanks to increasing R&D efforts, the Spanish industries have been able to catch up with respect to the Italian ones. These findings suggest that, also in countries classified as technology followers, R&D investment is a crucial condition for boosting manufacturing productivity.     

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.     

Assessing the Effectiveness of Quantitative and Qualitative Methods for R&D Project Proposal Evaluations

Abstract:

R&D project success and value is often difficult to predict at the proposal stage. Evaluation methods and their effectiveness vary considerably and are influenced by specific organizational cultures and managerial skill sets. A two-year field study examined the strength, challenges, and limitations of various R&D project evaluation and selection methods. The results suggest that for many project situations, the decision-making process must go beyond analytical methods. It should include both quantitative and qualitative measures and be linked with the internal and external support groups, as well as be strategically aligned with the enterprise. This article identifies specific managerial actions and organizational conditions for evaluating and selecting R&D proposals, aimed at optimizing future value and chances of success.     

R&D and the overseas earnings of Indian firms

This article examines the impact of undertaking R&D, a measure of the enhancement of dynamic capabilities, on firms' overseas earnings patterns, for a panel of several thousand Indian firms, for the period from 1991–92 to 2005–06. The results show that undertaking R&D spending is associated with a significant rise in firms' average overseas earnings levels. These results point to the need for materially enhancing the very low levels of R&D undertaken by firms in India.     

Review of nanomaterials R&D in 21st century in Thailand with highlight on nanoparticle technology

The authors first survey, classify, analyze and summarize the main statistics on international papers on nanomaterials (nanoparticles) published by Thai and foreign authors affiliated with organizations and institutions in Thailand. To get a better overall and more balanced view of Thailand’s strengths and specific fields of national interest, the corresponding statistics of selected ASEAN countries (Singapore, Malaysia, Indonesia, and Vietnam) and Japan are also collected, analyzed and compared. Next the emphasis turns to nanomaterials, including nanoparticle technology, research in Thailand. The strengths and fields of interest of selected centers/labs are highlighted, especially those that have not been described recently elsewhere. Applications of nanomaterials/nanoparticles in Thailand are also briefly introduced.     

Using multi-hub structures for international R&;D: Organisational inertia and the challenges of implementation

Abstract and Key Results

Driving factors for service providers to participate in standardization: Insights from the Netherlands

The paper aims to identify factors influencing the service providers' decision to participate in formal standardization at national standards bodies. The paper develops firm- and industry-specific hypotheses and tests them based on a sample of 5,812 Dutch service providers of which 174 actively participated in the Dutch standards body NEN. Our results reveal that company size, export activities, internal R&D and innovation activities are positively related to the service provider's likelihood to participate in formal standardization. Additionally, the service industry and the service type are related to the propensity to standardize. The analysis is limited to Dutch companies' involvement at the Dutch standards body and does not consider their engagement in standardization consortia. The paper combines a large and representative sample of service companies with information about service companies' engagement in standardization for the first time. The findings reveal specific characteristics of service companies active in standardization, which allow the derivation of management and policy implications.     

A Dynamic Comparative Analysis of International Innovation Networks in Emerging Market MNCs

This paper compares the international innovation strategies of emerging market MNCs (EMNCs) with those of developed country MNCs (DMNCs). More specifically, we analyze the patent outcomes related to the use of international innovation networks (IINs) of EMNCs in developed markets compared with those of DMNCs in emerging markets. We explore the convergence and volatility patterns in patent generation within these IINs, considering the use of overseas R&D affiliates and the outcomes of interactions between foreign R&D affiliates and home headquarters for generating patents over a 20-year period. Our findings are broadly supportive of the idea that the trends in the volume and volatility of patents generated from the underlying IINs used by EMNCs are converging with those of DMNCs. This is in line with the predictions of a number of current international business theories regarding EMNC international expansion.     

Foreign Subsidiaries and Technology Sourcing in Spain

Firms acquire external technological knowledge via different channels. In this paper, we compare the technology sourcing of foreign subsidiaries and domestic firms looking at domestic R&D outsourcing, international R&D outsourcing, domestic cooperation for innovation and international cooperation for innovation. We use data from the Spanish Technological Innovation Panel for the years 2005–2009 for 10,206 innovative firms operating in Spain. We apply a multivariate probit specification which allows for systematic correlations among the different choices. The results show that the different technology sourcing choices are interdependent and that foreign subsidiaries show a different pattern of external technology sourcing. Compared to affiliated domestic companies, foreign subsidiaries show a smaller propensity for external technology sourcing via R&D outsourcing from independent firms in the host country, for international R&D outsourcing and for international cooperation for innovation. In contrast, foreign subsidiaries show a greater propensity for domestic cooperation for innovation. However, foreign subsidiaries are not a homogenous group in this respect.