R&D efficiency and economic performance: A cross-country analysis using the stochastic frontier approach

This paper constructs a cross-country production model for evaluating the relative efficiency of aggregate R&D activities. Stochastic frontier methods incorporating translog specification are applied to data of 30 countries in recent years. R&D capital stock and manpower are considered as inputs; patents and academic publications are regarded as outputs. Environmental factors that influence R&D performance are also taken into account. The means of efficiency scores without taking the environmental effects into account are about 0.65 in the cross-country study. After controlling for the operating environment, the means increase to about 0.85. R&D performance indices show a positive correlation with income level. Policy implications on resources allocation and R&D strategies are discussed.