The relationship between R&D expenditures, patents granted and firm performance in European high-tech industries
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2020-07-29
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en
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Abstract
This study assesses the relationship between R&D expenditures, patents granted and firm performance. Research objects are high-tech European industries as identified by Eurostat which are; the pharmaceutical, electronics-telecommunication, computer and office machines, aerospace and scientific instruments industries. The data over these industries are collected over the UK, France, Germany and the Netherlands. The study is built up in a two-step analysis. First, a simplified DEA analysis with no modification is conducted with input variable R&D expenditures and output variable patents granted. The calculated R&D is calculated for each industry in order to measure if there are significant differences. The second step of the analysis are panel data regressions of R&D efficiency and patents granted as independent variable on firm performance, which is operationalized as operating revenue. The results of the study are that there is a significant difference between R&D efficiency rates between the five industries and that patents granted is a better indicator for firm performance than R&D efficiency. However, the relationship remains weak and strongly industry dependent. This study contributes to the existing literature by strengthening the importance of industry dependency in R&D effects research.
Keywords: Firm performance, patents granted, R&D efficiency, R&D expenditures, data envelopment analysis, panel data, panel data regressions, fixed effects.
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Faculteit der Managementwetenschappen