Showing papers on "R&D intensity published in 1998"

R&D Cooperation and R&D Intensity: Theory and Micro–Econometric Evidence for German Manufacturing Industries

Abstract: This paper develops a three stage oligopoly game for R&D cooperation, R&D expenditure and product market competition. In the first stage, firms decide whether or not to conduct R&D in cooperation with other firms. In the second stage the level of R&D investment is determined. Finally, firms compete in a Cournot–oligopoly product market. While earlier models on R&D cooperation only considered process innovation, the model presented here also takes product innovation into account. It is shown that the optimal R&D investment has virtually the same structure for both process and product innovation. The main hypothesis of our theoretical model are tested in the empirical part of this paper.

Understanding R&D intensity indicators: Effects of differences in industrial structure and country size

Abstract: This report explores a range of problems associated with the interpretation of research and development (R&D) intensities across countries. Our argument is that this commonly-used indicator contains a number of subtle problems which must be taken into account when using it to compare innovation performance. Expenditure on R&D as a proportion to some measure of total economic activity is a frequently used measure for comparing the extent of innovation activities across different kinds of units, be they firms, industries, national economies, etc. This ratio is often referred to as R&D intensity. At the level of national economies, total R&D expenditures to GDP (gross domestic product) in a given year is frequently used to compare the innovative efforts of different countries. Often countries are simply compared on the basis of this ratio. For instance, R&D expenditures of a given country may be judged insufficient by a reference to data showing that the R&D intensity of the country in question is substantially smaller than the R&D intensity of certain other countries. There are two basic problems in using this indicator to compare innovation performance. The first is that, as an empirical regularity, large countries have higher R&D-intensities than small countries. The second problem is that R&D-intensity is obviously affected by the industrial structure. For example, if one country has a large proportion of its output in R&D-intensive industries, it will have a higher overall R&D intensity, even if R&D/output ratios are equal in every industry. What is the relative importance of country size and industrial structure in determining the value of the R&D inensity indicator? We argue that size, in itself, offers no real explanation of inter-country R&D intensity differences. However, when we decompose R&D intensity in manufacturing into, on the one hand, a component expressing the industrial structure of the country in question, and, on the other hand, a component expressing how the country in general compares with the other countries in terms of R&D intensity inside each industry, we find a clear and iii T. Sandven and K. Smith ,'($ strong positive association between economy size and the structure component. The larger the size of the economy, as measured by GDP, the higher the R&D intensity in manufacturing we would predict from knowledge only of the industrial structure, or, in other words, the more the industrial structure is favourable to a high R&D intensity in manufacturing. This report takes up a number of methodological issues in the use and interpretation of R&D data. It discusses and criticises the so-called STIBERD indicator developed by OECD to take account of industrial structure differences, and offers guidelines for new approaches in understanding comparative R&D intensities. iv T. Sandven and K. Smith ,'($