EU–US differences in the size of R&amp;D intensive firms: do they explain the overall R&amp;D intensity gap?

McCann, Philip; Brandsma, Andries

doi:10.3152/030234210x508633

Cited by 17 publications

(8 citation statements)

References 18 publications

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“…On the one hand, some scholars have argued that the lower European R&D spending is mainly due to the so-called structural composition effect and have provided evidence supporting their thesis. This sectoral composition effect arises because the R&D-intensive manufacturing and R&D-intensive service sectors are under-represented in the European economy in comparison to the US (European Commission, 2007;Mathieu and van Pottelsberghe de la Potterie, 2008;Lindmark et al, 2010;Ortega-Argilés and Brandsma, 2010). This view therefore treats the differences in R&D spending rather as an artifact of differences in sector composition.…”

Section: Introductionmentioning

confidence: 99%

R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis

Castellani

Piva

Schubert

et al. 2019

Technological Forecasting and Social Change

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Using data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity.Based on these findings, we make a case for a learning-based and selective R&D funding, which -instead of purely aiming at stimulating higher R&D expendituresworks on improving the firms' capabilities to transform R&D into productivity gains. Abstract ABSTRACTUsing data on the US and EU top R&D spenders from 2004 until 2012, this paper investigates the sources of the US/EU productivity gap. We find robust evidence that US firms have a higher capacity to translate R&D into productivity gains (especially in the high-tech industries), and this contributes to explaining the higher productivity of US firms. Conversely, EU firms are more likely to achieve productivity gains through capital-embodied technological change at least in medium and low-tech sectors. Our results also show that the US/EU productivity gap has worsened during the crisis period, as the EU companies have been more affected by the economic crisis in their capacity to translate R&D investments into productivity. Based on these findings, we make a case for a learning-based and selective R&D funding, which -instead of purely aiming at stimulating higher R&D expenditures -works on improving the firms' capabilities to transform R&D into productivity gains.

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Section: Introductionmentioning

confidence: 99%

R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis

Castellani

Piva

Schubert

et al. 2019

Technological Forecasting and Social Change

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“…Both approaches suggested that new knowledge was a key feature of economic performance, but the relationships between knowledge, innovation and firm types were for the first time examined empirically. These empirical approaches represented a major potential breakthrough because while, on the one hand, theoretical arguments from the international business literature suggested that large firms were systematically more likely to be more innovative than other firm types, on the other hand, some Schumpeterian arguments tended to point to the advantages afforded to small firms (Ortega‐Argilés et al, 2009; Ortega‐Argilés and Brandsma, 2010). Yet, without comprehensive data and testing, the debate could not be satisfactorily resolved either way.…”

Section: Evolutions In Our Understanding Of Innovationmentioning

confidence: 99%

A Survey of the Innovation Surveys

Hong

Oxley

McCann

2012

Journal of Economic Surveys

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Both theoretical and conceptual understanding of innovation has developed significantly since the early 1980s. More noticeable, however, are the major changes that have been experienced in empirically-oriented innovation research as a result of the introduction of firm level innovation surveys. Collecting innovation related data via firm based surveys has now become a common practice for many countries for example, Canada, United States, Malaysia, Taiwan, Australia, New Zealand as well as almost all EU countries. These survey-lead approaches have transformed our understanding of the nature and determinants of innovation and also increased our understanding of the role played by innovation in growth. At the same time, the surveys themselves have also been adapted as our conceptual understanding of innovation has increased. As such, the balance of innovation-related research has shifted from a theoretical to a primarily empiricist-lead agenda, and increasingly combined both quantitative and qualitative approaches. The objective of this paper is examine how our understanding of innovation has evolved over the last few decades, to identify the major theoretical and empirical influences on our understanding, and to assess the role which innovation surveys have played in this evolution. Evolutions in Our Understanding of InnovationOur understanding of the roles which innovation, technology and new firm formation play in economic growth has been slowly developing over many decades. Classical authors including Marx, Marshall and Schumpeter all speculated on the role which technology and knowledge played in transforming the economy, by focusing on the distributional, clustering and restructuring aspects of technological change, respectively. However, it is Schumpeter (1934, 1939) who is most notably associated with the phenomenon of innovation, which he described in terms of processes of 'creative destruction', and

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“…Insufficient investment in R&D is often argued to be a key reason why Europe has lagged over the years behind the US in terms of economic growth (Uppenberg, 2009), and many scholars argue that the European delay in terms of private R&D investment is mainly due to a sectoral composition effect . This sectoral composition effect arises because the ICT sectors, and the R&D‐intensive manufacturing and R&D‐intensive service sectors are under‐represented in the European economy in comparison with the US (European Commission, 2007a; Mathieu and van Pottelsberghe de la Potterie, 2008; Lindmark et al , 2010; Ortega‐Argilés and Brandsma, 2010). As such, this argument implies that any potential productivity gains associated with new technological advancements will proportionately have a lower impact on the EU than the US economy.…”

Section: The Randd–ict Intensity Gapmentioning

confidence: 99%

“…However, these impacts are not necessarily related to large firms. Using data from the EU R&D Scoreboard, Ortega‐Argilés and Brandsma (2010) run a micro‐econometric analysis the characteristics of the R&D intensity of firms. Their findings suggest that the higher level of R&D intensity in the US with respect to the EU is mainly due to the greater role that high‐R&D intensive small and medium enterprises (SMEs) play in explaining the R&D intensity in US in comparison with the EU.…”

Section: The Randd–ict Intensity Gapmentioning

confidence: 99%

The Transatlantic Productivity Gap: A Survey of the Main Causes

Ortega‐Argilés¹

2012

Journal of Economic Surveys

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During the last 2 decades, Europe's economy experienced a productivity slowdown whereas the United States (US) economy exhibited a marked acceleration. The result is that since the early 1990s the relative productivity levels between the two regions have continuously diverged, leading to a transatlantic productivity gap. Much of the explanation for this is the strong performance of the US in the so-called 'new economy' or 'knowledge economy' and in particular the underinvestment in R&D, and as a result, productivity and innovation has been at the forefront in the European Policy agenda. However, various explanations for the US-European Union transatlantic productivity gap suggest that the picture is rather more complex than simply the effects on, or the result of, particular technology-driven sectors.

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EU–US differences in the size of R&D intensive firms: do they explain the overall R&D intensity gap?

Cited by 17 publications

References 18 publications

R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis

R&D and productivity in the US and the EU: Sectoral specificities and differences in the crisis

A Survey of the Innovation Surveys

The Transatlantic Productivity Gap: A Survey of the Main Causes

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