Are Economically Advanced Countries More Efficient in Basic and Applied Research?

TL;DR

This study evaluates the R&D efficiency of EU countries from 2008 to 2014, finding that wealthier nations tend to be more efficient, especially in applied research, using super-efficient DEA analysis.

Contribution

It introduces a robust DEA approach to measure and compare R&D efficiency across EU countries, considering economic factors and research types.

Findings

Higher GDP per capita correlates with greater R&D efficiency.

Efficiency is more distinctly observed in applied research outputs.

Economic wealth influences overall and specialized R&D efficiency.

Abstract

Research and development (R&D) of countries play a major role in a long-term development of the economy. We measure the R&D efficiency of all 28 member countries of the European Union in the years 2008--2014. Super-efficient data envelopment analysis (DEA) based on robustness of classification into efficient and inefficient units is adopted. We use the number of citations as output of basic research, the number of patents as output of applied research and R&D expenditures with manpower as inputs. To meet DEA assumptions and to capture R&D characteristics, we analyze a homogeneous sample of countries, adjust prices using purchasing power parity and consider time lag between inputs and outputs. We find that the efficiency of general R&D is higher for countries with higher GDP per capita. This relation also holds for specialized efficiencies of basic and applied research. However, it is much stronger for applied research suggesting its outputs are more easily distinguished and captured. Our findings are important in the evaluation of research and policy making.