European R&D efficiency

Abstract

This paper explores the capacity to produce new knowledge proxied by patents granted in 18 industries in 11 European economies. For each industry in each country, the number of granted U.S. Patent and Trademark Office patents is recorded over the 1991–2005 period. Controlling for research and development, industry composition, and institutional setting, the paper shows that systematic differences in patent intensity exist between the studied countries, such that almost all industries are affected by country-specific conditions, suggesting that the countries’ innovation systems differ in efficiency. The countries with the highest R&D efficiency are Sweden and Finland, followed by the Netherlands and Germany.

Keywords:

• patent
• R&D
• innovation
• R&D productivity
• international comparison
• panel data

JEL code:

• L6
• O5
• O33

Notes

1. The annual labor productivity growth in the countries’ manufacturing industries for the 1991–2005 period is as follows: Sweden, 6.5; Finland, 6.2; France, 3.7; Great Britain, 3.4; The Netherlands, 3.4; Germany, 3.4; Denmark, 2.4; Belgium, 2.4; Norway, 2.1; Spain, 1.9; and Italy, 1.6. Source: U.S. Department of Labor.

2. IPC codes are first aggregated into 44 broad technological fields, and these technological fields are matched with 44 industrial sectors. Note that technological fields simultaneously contribute to several industrial sectors since nearly every patented technology can be applied in different industries.

3. One should note that Schmoch's matrix is not the only way to conduct ISIC–IPC matching and that other concordance tables exist. We apply the matrix provided by Schmoch et al. (2003) for the following reasons: it is one of the most recent concordance tables, it is based on European data and it has been recently applied by several authors (see Danguy, De Rassenfosse, and VanPottelsberghe de la Potterie 2010; de Rassenfosse 2010; Schmidt-Ehmcke and Zloczysti 2011).