Building BRICS: 2-Stage DEA analysis of R&D Efficiency*

Should inputs such as bank finance affect innovation in BRICS vs. developed countries similarly? Arguably these elasticities may depend on a country's economic progress (Gerschenkron, 1962; Liu and White, 2001). Applying a combination of DEA and Tobit to a sample of 22 countries, we show how innovation (measured patents, scientific publications and high-tech sectoral output) responds favourably to private-sector R&D. No significant differences are recorded for BRICS countries. Differences emerge between BRICS and non-BRICS for the elasticity of innovative efficiency to banking inputs.

[1]  M. Farrell.  The Measurement of Productive Efficiency , 1957 .

[2]  Jeffrey L. Furman,et al.  The Determinants of National Innovative Capacity , 2000 .

[3]  John A. Mathews,et al.  National systems of economic learning: the case of technology diffusion management in East Asia , 2001, Int. J. Technol. Manag..

[4]  M. Kunc,et al.  National Systems of Innovations and Natural Resources Clusters: Evidence from Copper Mining Industry Patents , 2009 .

[5]  I. Jolliffe.  A Note on the Use of Principal Components in Regression , 1982 .

[6]  P. W. Wilson,et al.  Two-stage DEA: caveat emptor , 2011 .

[7]  Patel Parimal,et al.  National Innovation Systems: Why They Are Important, And How They Might Be Measured And Compared , 1994 .

[8]  N. Spulber,et al.  Economic Backwardness in Historical Perspective: A Book of Essays , 1964 .

[9]  Léopold Simar,et al.  Non-parametric tests of returns to scale , 2002, Eur. J. Oper. Res..

[10]  Naubahar Sharif,et al.  Emergence and development of the National Innovation Systems concept , 2006 .

[11]  Boaz Golany,et al.  Foundations of data envelopment analysis for Pareto-Koopmans efficient empirical production functions , 1985 .

[12]  Esther P. Y. Tang,et al.  Innovation strategy and performance during economic transition : evidences in Beijing, China , 2009 .

[13]  Xielin Liu,et al.  Comparing innovation systems: a framework and application to China’s transitional context , 2001 .

[14]  Stephen L. Parente,et al.  Bigger is Better: Market Size, Demand Elasticity, and Innovation , 2010 .

[15]  E. Papyrakis,et al.  Natural Resources, Innovation, and Growth , 2004 .

[16]  A. Gerschenkron,et al.  Economic Backwardness in Historical Perspective. A Book of Essays , 1963 .

[17]  E. Wang,et al.  Relative efficiency of R&D activities: A cross-country study accounting for environmental factors in the DEA approach , 2007 .

[18]  T. Coelli.  RECENT DEVELOPMENTS IN FRONTIER MODELLING AND EFFICIENCY MEASUREMENT , 1995 .

[19]  Paul W. Wilson,et al.  FEAR 1.15 User's Guide , 2010 .

[20]  P. W. Wilson,et al.  Estimation and inference in two-stage, semi-parametric models of production processes , 2007 .

[21]  Francisco J. Arcelus,et al.  On the efficiency of national innovation systems , 2003 .

[22]  A. U.S.,et al.  Measuring the efficiency of decision making units , 2003 .

[23]  Petra Zloczysti,et al.  R&D Efficiency and Barriers to Entry: A Two Stage Semi-Parametric DEA Approach , 2010 .

[24]  Daron Acemoglu,et al.  Market Size in Innovation: Theory and Evidence from the Pharmaceutical Industry , 2003 .

[25]  Cheng Hsiao,et al.  Analysis of Panel Data , 1987 .

[26]  Rolf Färe,et al.  Measuring the technical efficiency of production , 1978 .

[27]  Ning Ma,et al.  A study of the relationship between competitiveness and technological innovation capability based on DEA models , 2006, Eur. J. Oper. Res..

[28]  John A. Mathews,et al.  National innovative capacity in East Asia , 2005 .

[29]  J. Mathews,et al.  China's national innovative capacity , 2008 .