The efficiency of spending on R&D in Latin America region

ABSTRACT

Innovativeness is one of the key factors stimulating economic growth. Improving innovative capacities is especially important for developing countries. The Latin American region is characterized by a variety of innovation policies. In this article, the author attempts to answer the question of which Latin American countries most efficiently spend funds on R&D. The study presented in this article also verifies the hypothesis that increased spending on R&D does not result in a proportional increase in the intended innovative results. The main research methodology employed is data envelopment analysis (DEA), which allows for assessing input-output efficiency and indicates the efficiency frontier for the period between 2000 and 2017.

KEYWORDS:

• Innovation
• DEA methodology
• relative efficiency
• R&D

JEL CLASSIFICATION:

• O38
• O57
• R15

Acknowledgments

I would like to thank the chairperson, Professor Lawrence J. White from New York University, and the seminar participants at the WEAI 94th Annual Conference (San Francisco, California, USA, Friday–Tuesday, 28th June – 2nd July 2nd 2019) for useful comments. I also feel grateful to Professor Jiunn-Rong Chiou from National Central University (Taiwan), Professor Stephan F. Gohmann from University of Louisville (USA), and Professor Marina Lovchikova from University of California (USA) for their helpful comments and suggestions. I also feel grateful to Professor Pete Tyler (University of Cambridge), Professor Philip Arestis (University of Cambridge), Professor Alan Barrell (Cambridge Innovation Academy) for hosting me at University of Cambridge as a Visiting Scholar.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

The project is financed by the Ministry of Science and Higher Education in Poland under the program ‘Regional Initiative of Excellence’ 2019 – 2022, project number 015/RID/2018/19, total funding amount 10 721 040,00 PLN; Ministerstwo Nauki i Szkolnictwa Wyższego