Evaluation of multi-period regional R&D efficiency: An application of dynamic DEA to China's regional R&D systems

The existing studies about regional R&D efficiency measurement in a specific period have not considered the dynamic interdependence between regional R&D activities over different periods. This paper offers a solution to this problem in multi-period regional R&D efficiency measurement with a novel application to China's regional R&D systems. This solution can present a systemic measurement for the overall efficiency score of multi-period regional R&D investment activities, and deduce a weighted decomposition of the overall efficiency score into period efficiency scores. This paper develops a dynamic analytical framework with a new estimation technique from a long-term and systemic perspective associated with data envelopment analysis technique. Our efficiency model with endogenous weights on period efficiencies effectively accounts for the linking function and double role of R&D capital stock in the operation of connected regional R&D systems and the intertemporal dependence of R&D investment on R&D outputs. The R&D capital stock as the carry-over estimated using the perpetual inventory method helps this efficiency model to account for the time lag and multi-period influence of R&D inputs on R&D outputs. This approach is applied to a new database of R&D input-output systems in China's provinces during the first five-year period (2006-2010) after China's National Plan for Medium- and Long-term Scientific and Technological Development (NPMLSTD).