R&D expenditure in the EU: convergence or divergence?

Figures & data

Figure 1. Evolution of the R&D expenditure in the EU28. Source: Eurostat and own elaboration

Table 1. Descriptive statistics.

	Total			Government			Business enterprise			Higher education
	2004	2008	2015	2004	2008	2015	2004	2008	2015	2004	2008	2015
Mean*	1.30	1.44	1.63	0.18	0.20	0.21	0.79	0.87	0.97	0.31	0.36	0.44
St. Dev.	0.84	0.88	0.82	0.08	0.08	0.10	0.67	0.72	0.66	0.19	0.19	0.23
Min.	0.34	0.39	0.46	0.01	0.02	0.05	0.07	0.09	0.08	0.02	0.04	0.05
Max.	3.39	3.55	3.26	0.35	0.36	0.43	2.49	2.63	2.27	0.78	0.76	1.08
Range	3.05	3.16	2.80	0.34	0.34	0.38	2.42	2.54	2.19	0.76	0.72	1.03

* Note: unweighted average. Source: Eurostat and own elaboration

Figure 2. Sigma convergence. Source: Own elaboration.

Table 2. Test of sigma convergence.

	All sectors	Conv.	Govern.	Conv.	Business enterprise	Conv.	Higher education	Conv.
a) EU28
$\widehat{\mathrm{\alpha }}$ $\widehat{\beta }$ R^2	0.6680 (108.80) −0.0123*** (−14.75) 0.9560	Yes	0.4402 (47.05) 0.0027* (2.12) 0.3106	No (Div.)	0.8791 (99.26) −0.0169*** (−14.03) 0.9517	Yes	0.5809 (41.36) −0.0045** (−2.37) 0.3595	Yes
b) EU15
γ (%)	−2.05		0.49		−1.86		−1.16
$\widehat{\mathrm{\alpha }}$ $\widehat{\beta }$ R^2	0.4538 (91.00) −0.069*** (−10.12) 0.9110	Yes	0.4017 (34.44) 0.0111*** (6.98) 0.8298	No (Div.)	0.5635 (103.19) −0.0083*** (−11.18) 0.9259	Yes	0.4133 (34.71) −0.0013 (−0.81) 0.0621	No
γ (%)	−1.64		2.01		−1.42		−0.48
c) EU13
$\widehat{\mathrm{\alpha }}$ $\widehat{\beta }$ R^2	0.4291 (12.41) 0.0114** (2.43) 0.3704	No (Div.)	0.4874 (41.49) −0.0082*** (−5.15) 0.7263	Yes	0.6682 (14.70) 0.0174** (2.82) 0.4438	No (Div.)	0.5313 (21.17) 0.0017 (0.50) 0.0239	No
γ (%)	0.26		−1.28		0.39		−0.83

Source: Own elaboration. ***, ** and * denote significance at the 1%, 5% and 10% levels, respectively.

t-statistics are between parentheses.

Figure 3. Average across clubs. Source: own elaboration.

Figure 4. Average relative transition curve for each club. Source: own elaboration.

Table 3. Convergence club results: EU28.

	Club	Countries	Type	Aver.^+	$t_{\widehat{b}}$	$\widehat{b}(s.e.)$	$\widehat{\mathrm{\alpha }}$
a) Total	Full sample				−6.177*	−0.386 (0.063)	−0.193
	Club 1	AT, SE, DK, FI, DE, BE, SI, NL, CZ, SK	High	2.480	4.284	0.488 (0.114)	0.244
	Club 2	BG, EE, IE, EL, ES, FR, HR, IT, CY, LV, LT, LU, HU, MT, PL, PT, RO, UK	Low	1.196	−1.571	−0.295 (0.188)	−0.148
b) Government	Full sample				−11.850*	−0.967 (0.082)	−0.483
	Club 1	DE, LU, CZ, SK, MT	High	0.289	0.594	0.173 (0.290)	0.086
	Club 2	SI, FR, EL, NL, PL, FI, ES, HR, BG, BE, RO, IT, LT, HU, EE, LV, AT	Medium+	0.214	0.604	0.189 (0.313)	0.094
	Club 3	DK, SE, UK	Medium-	0.109	0.840	0.321 (0.382)	0.160
	Club 4	PT, CY, IE	Low	0.075	−0.672	−0.527 (0.784)	−0.264
c) Business enterprise	Full sample				−21.753*	−0.365 (0.017)	−0.182
	Club 1	SE, AT, DE, FI, DK, BE, SI, FR, NL UK, IE, CZ, HU, IT, BG, ES, PL, EL	High	1.278	0.675	0.043 (0.064)	0.022
	Club 2	EE, LU, PT, HR, MT, SK, LT, RO, LV, CY	Low	0.416	1.379	0.356 (0.258)	0.178
d) Higher education	Full sample				−16.762*	−0.773 (0.046)	−0.386
	Club 1	AT, FI, EE, LT, SK, CZ	High	0.571	3.152	1.390 (0.441)	0.645
	Club 2	NL, PT, DE, BE, EL, MT, LU	Medium+	0.424	2.358	0.309 (0.131)	0.154
	Club 3	UK, IT, LV, PL, CY	Medium-	0.326	1.902	0.461 (0.242)	0.230
	Club 4	ES, IE, SI	Low+	0.324	0.436	0.256 (0.587)	0.128
	Club 5	HR, HU	Low	0.204	1.046	8.398 (8.230)	4.199
	Club 6	RO, BG	Low-	0.071	1.534	1.258 (0.820)	0.629
	Diverging	DK	High++	1.008
		SE	High+	0.886
		FR	Medium++	0.460

* Indicates rejection of the null hypothesis of convergence at the 5 per cent level. + Average 2011–2015.

Note: Abbreviations: AT – Austria, BE – Belgium, BG – Bulgaria, CZ – Czech Republic, DK – Denmark, DE – Germany, EE – Estonia, IE – Ireland,.

EL – Greece, ES – Spain, FR – France, HR – Croatia, IT – Italy, CY – Cyprus, LV – Latvia, LT – Lithuania, LU – Luxembourg, HU – Hungary, MT – Malta,.

NL – Netherlands, PL – Poland, PT – Portugal, RO – Romania, SI – Slovenia, SK – Slovakia, FI – Finland, SE – Sweden, UK – United Kingdom.

Source: own elaboration.

Table 4. Summary of the results by country.

Country	Total	Government	Enterprise	Higher education
Belgium	Club1_High	Club2_Med+	Club1_High	Club2_Med+
Bulgaria	Club2_Low	Club2_Med+	Club1_High	Club6_Low-
Czech Republic	Club1_High	Club1_High	Club1_High	Club1_High
Denmark	Club1_High	Club3_Med-	Club1_High	Div_High++
Germany	Club1_High	Club1_High	Club1_High	Club2_Med+
Estonia	Club2_Low	Club2_Med+	Club2_Low	Club1_High
Ireland	Club2_Low	Club4_Low	Club1_High	Club4_Low+
Greece	Club2_Low	Club2_Med+	Club1_High	Club2_Med+
Spain	Club2_Low	Club2_Med+	Club1_High	Club4_Low+
France	Club2_Low	Club2_Med+	Club1_High	Div_Med++
Croatia	Club2_Low	Club2_Med+	Club2_Low	Club5_Low
Italy	Club2_Low	Club2_Med+	Club1_High	Club3_Med-
Cyprus	Club2_Low	Club4_Low	Club2_Low-	Club_Med-
Latvia	Club2_Low	Club2_Med+	Club2_Low	Club3_Med+
Lithuania	Club2_Low	Club2_Med+	Club2_Low	Club1_High
Luxembourg	Club2_Low	Club1_High	Club2_Low	Club2_Med+
Hungary	Club2_Low	Club2_Med+	Club1_High	Club5_Low
Malta	Club2_Low	Club1_High	Club2_Low	Club2_Med+
Netherlands	Club1_High	Club2_Med+	Club1_High	Club2_Med+
Austria	Club1_High	Club2_Med+	Club1_High	Club1_High
Poland	Club2_Low	Club2_Med+	Club1_High	Club3_Med+
Portugal	Club2_Low	Club4_Low	Club2_Low	Club2_Med+
Romania	Club2_Low	Club2_Med+	Club2_Low	Club6_Low-
Slovenia	Club1_High	Club2_Med+	Club1_High	Club4_Low+
Slovakia	Club1_High	Club1_High	Club2_Low	Club1_High
Finland	Club1_High	Club2_Med+	Club1_High	Club1_High
Sweden	Club1_High	Club3_Med-	Club1_High	Div_High+
United Kingdom	Club2_Low	Club3_Med-	Club1_High	Club3_Med-

Source: Own elaboration.

Table 5. Transitions between clubs.

	Clubs	$t_{\widehat{b}}$	$\widehat{b}(s.e.)$
a) Total	Club 1 + club 2	−5.953*	−0.832 (0.140)
b) Government	Club 1 + club 2	1.037	0.251 (0.242)
	Club 2 + club 3	1.011	0.362 (0.358)
	Club 3 + club 4	0.678	0.329 (0.485)
c) Business enterprises	Club 1 + club 2	0.828	0.095 (0.114)
d) Higher education	Club 1 + club 2	4.198	2.132 (0.508)
	Club 2 + club 3	4.936	0.686 (0.139)
	Club 3 + club 4	8.200	1.331 (0.162)
	Club 4 + club 5	0.317	0.180 (0.569)
	Club 5 + club 6	−3.099*	−2.277 (0.741)

Source: own elaboration.

Table 6. Convergence club results: EU15.

	Club	Countries	Type	Aver.^+	$t_{\widehat{b}}$	$\widehat{b}(s.e.)$	$\widehat{\mathrm{\alpha }}$
a) Total	Full sample				−15.629*	−0.638 (0.041)	−0.319
	Club 1	SE, AT, DK, FI, DE, BE, NL	High	2.809	4.576	0.719 (0.157)	0.359
	Club 2	UK, IE, IT, EL	Medium-Low	1.325	0.556	0.191 (0.343)	0.090
	Club 3	LU, PT, ES	Medium-Low	1.316	5.398	3.058 (0.566)	1.529
	Diverging	FR	High	2.226
b) Government	Full sample				−16.867*	−1.258 (0.075)	−0.629
	Club 1	DE, LU	High	0.397	5.609	3.202 (0.571)	1.601
	Club 2	FR, EL, NL, FI, ES, BE, IT, AT	Medium	0.221	0.979	0.347 (0.354)	0.173
	Club 3	UK, SE, DK	Low	0.109	0.840	0.321 (0.382)	0.160
	Club 4	PT, IE	Low-	0.078	−0.602	−0.543 (0.903)	−0.272
c) Business enterprise	Full sample				−59.894*	−0.584 (0.010)	−0.292
	Club 1	SE, AT, DE, FI, DK, BE, FR, NL	High	1.827	5.747	0.668 (0.116)	0.334
	Club 2	UK, IE	Medium	1.085	1.855	18.612 (10.033)	9.306
	Club 3	IT, LU, ES, PT, EL	Low	0.607	10.129	0.804 (0.079)	0.402
d) Higher education	Full sample				−44.672*	−1.023 (0.023)	−0.511
	Club 1	AT, FI	High	0.724	1.440	1.618 (1.123)	0.809
	Club 2	NL, PT, DE, BE, EL, LU	Medium	0.451	2.810	0.253 (0.090)	0.126
	Club 3	UK, IT	Medium	0.403	1.379	0.739 (0.536)	0.369
	Club 4	ES, IE	Low	0.353	1.864	18.101 (9.713)	9.050
	Diverging	DK	High++	1.008
	Diverging	SE	High+	0.886
	Diverging	FR	Medium	0.460

* Indicates rejection of the null hypothesis of convergence at the 5 per cent level. ⁺ Average 2011–2015.

Note: Abbreviations: AT – Austria, BE – Belgium, DK – Denmark, DE – Germany, IE – Ireland, EL – Greece, ES – Spain, FR – France, IT – Italy,.

LU – Luxembourg, NL – Netherlands, PT – Portugal, FI – Finland, SE – Sweden, UK – United Kingdom.

Source: own elaboration.

Table 7. Convergence club results: EU13.

	Club	Countries	Type	Aver.^+	$t_{\widehat{b}}$	$\widehat{b}(s.e.)$	$\widehat{\mathrm{\alpha }}$
a) Total	Full sample				−2.861*	−0.957 (0.334)	−0.478
	Club 1	SI, CZ, SK	High	1.713	0.323	0.149 (0.462)	0.075
	Club 2	BG, EE, HR, CY, LV, LT, HU, MT, PL, RO	Low	0.880	−1.584	−0.798 (0.504)	−0.399
b) Government	Full sample				−5.045*	−0.513 (0.102)	−0.256
	Club 1	CZ, SK, SI, PL, LV, MT	High	0.231	1.436	0.233 (0.163)	0.116
	Club 2	HR, BG, RO, LT, HU, EE	Medium	0.189	1.531	1.087 (0.710)	0.543
	Diverging	CY	Low	0.068
c) Business enterprise	Full sample				−4.044*	−0.971 (0.240)	−0.485
	Club 1	CZ, HU, BG, PL	High	0.682	2.519	0.702 (0.279)	0.351
	Club 2	EE, HR, MT, SK, LT	Medium	0.470	−0.259	−0.237 (0.918)	−0.118
	Diverging	SI	High+	1.852
	Diverging	RO	Low	0.172
	Diverging	LV	Low	0.180
	Diverging	CY	Low−	0.070
d) Higher education	Full sample				−13.475*	−1.004 (0.074)	−0.502
	Club 1	EE, LT, SK, CZ, LV, PL, MT, CY, SI	High	0.370	−1.381	−0.161 (0.117)	−0.080
	Club 2	HR, HU	Medium	0.204	1.020	6.965 (6.829)	3.482
	Club 3	RO, BG	Low	0.071	1.534	1.258 (0.820)	0.629

* Indicates rejection of the null hypothesis of convergence at the 5 per cent level. ⁺ Average 2011–2015.

Note: Abbreviations: BG – Bulgaria, CZ – Czech Republic, EE – Estonia, HR – Croatia, CY – Cyprus, LV – Latvia, LT – Lithuania, HU – Hungary,.

MT – Malta, PL – Poland, RO – Romania, SI – Slovenia, SK – Slovakia.

Source: own elaboration.

Figure A1. Sigma convergence (per capita expenditure, EU28).

Table A1. Test of sigma convergence (per capita, EU28).

	All sectors	Conv.	Govern.	Conv.	Business enterprise	Conv.	Higher education	Conv.
$\widehat{\mathrm{\alpha }}$ $\widehat{\beta }$ R^2	1.0383 (257.78) −0.0125*** (−22.87) 0.9812	Yes	0.7321 (24.59) 0.0369*** (9.11) 0.8926	No	1.2080 (128.38) −0.0202*** (−15.81) 0.9615	Yes	0.9656 (55.65) −0.0061** (−2.59) 0.4009	Yes
γ (%)	−1.25		3.03		−1.49		−1.00

Source: Own elaboration. ***, ** and * denote significance at the 1%, 5% and 10% levels, respectively. t-statistics are between parentheses.

Table A2. Convergence club results – per capita expenditure.

	Club	Countries	Type	$t_{\widehat{b}}$	$\widehat{b}(s.e.)$	$\widehat{\mathrm{\alpha }}$
a) Total	Full sample			−23.898*	−0.623 (0.026)	−0.311
	Club 1	SE, DK, AT, FI, DE	High+	1.728	0.228 (0.132)	0.114
	Club 2	LU, BE, NL, FR, UK, IE, SI, CZ	High	1.311	0.128 (0.098)	0.064
	Club 3	IT, ES, EE, PT, SK, MT, EL, HU, LT, PL, CY, HR, LV, BG, RO	Low	−0.137	−0.023 (0.165)	−0.011
b) Government	Full sample			−14.077*	−1.507 (0.107)	−0.753
	Club 1	NL, FR, FI, BE, CZ, SK, MT	Medium+	0.866	0.320 (0.370)	0.160
	Club 2	AT, SI, ES, SE, IT, UK, EL, DK, PL, EE	Medium−	0.443	0.116 (0.262)	0.058
	Club 3	IE, LT, HR, HU, LV, RO	Low+	2.254	0.740 (0.328)	0.370
	Club 4	PT, CY, BG	Low−	1.897	2.073 (1.093)	1.036
	Diverging	LU, DE	High
c) Business enterprise	Full sample			−30.965*	−0.488 (0.016)	−0.244
	Club 1	SE, DK, AT, DE, FI, BE, LU, FR, IE, NL, UK, SI	High	1.845	0.086 (0.046)	0.043
	Club 2	IT, CZ, ES, HU, EE, MT, PL, SK, BG	Low+	3.945	0.282 (0.072)	0.141
	Club 3	PT, EL, HR, LT, CY, LV, RO	Low−	0.324	0.082 (0.255)	0.041
d) Higher education	Full sample			−21.749*	−0.861 (0.040)	−0.430
	Club 1	DK, SE	High+	−0.495	−0.413 (0.834)	−0.206
	Club 2	FI, NL, LU, AT, DE, BE, FR, IE	High	0.121	0.007 (0.055)	0.003
	Club 3	UK, PT, EE, IT, ES, CZ, SK, LT, EL, MT, CY, SI, LV, PL	Low	0.293	0.041 (0.139)	0.020
	Club 4	HR, HU	Low−	0.968	1.860 (1.923)	0.830
	Club 5	RO, BG	Low−	2.021	2.339 (1.157)	1.170

* Indicates rejection of the null hypothesis of convergence at the 5 per cent level. ⁺ Average 2011–2015.

Source: own elaboration.

Table A3. Comparison of main results from GDP and per capita perspectives

total.

Per capita %GDP	High+	High	Low
High	AT, FI, SE, DE, DK	BE, SI, NL, CZ	SK
Low		IE, LU, FR, UK	BG, EE, EL, ES, HR, HU, IT, CY, LV, LT, MT, PL, PT, RO

Notes: we observe two major results: IE, LU, FR and UK are classified into the low group in the GDP approach, but in the high one in per capita expenditure. On the contrary, SK, high in the GDP perspective but low in per capita terms.

Figure B1. Sigma convergence (source of funds, EU28).

Table B1. Test of sigma convergence (source of funds, EU28).

	All sectors	Conv.	Govern.	Conv.	Business enterprise	Conv.	Higher education	Conv.
$\widehat{\mathrm{\alpha }}$ $\widehat{\beta }$ R^2	0.6391 (92.30) −0.0135*** (−11.00) 0.9453	Yes	0.3897 (36.30) 0.0075*** (3.92) 0.6874	No	0.8666 (41.47) −0.0147*** (−3.95) 0.6902	Yes	0.9896 (34.93) −0.0233*** (−4.63) 0.7537	Yes
γ (%)	−2.02		1.68		−1.20		−2.61

Source: Own elaboration. ***, ** and * denote significance at the 1%, 5% and 10% levels, respectively. t-statistics are between parentheses.

Table A4. Comparison of main results from GDP and per capita perspectives government.

Per capita %GDP	High	Medium	Low
High	LU, DE	CZ, SK, MT
Medium		SI, FR, EL, NL, PL, FI, ES, BE, IT, EE, AT, DK, SE, UK	HR, BG, RO, LT, HU, LV
Low			PT, CY, IE

Notes: in this case the results are very similar from the two perspectives.

Table A5. Comparison of main results from GDP and per capita perspectives business enterprise.

Per capita %GDP	High	Low
High	SE, AT, DE, FI, DK, BE, SI, FR, NL, UK, IE	CZ, BG, HU, PL, IT, EL, ES
Low	LU	EE, PT, HR, MT, SK, LT, RO, LV, CY

Notes: we detect two main differences: on the one hand, CZ, BG, HU, PL, IT, EL and ES, with high data in the GDP perspective, but low when considering the per capita measures. And on the other hand, LU with the inverse result.

A3.4. Table A6. Comparison of main results from GDP and per capita perspectives higher education.

Per capita %GDP	High	Low
High	DK, SE, AT, FI	EE, SK, LT, CZ
Medium	NL, BE, FR, DE, LU	PT, EL, MT, UK, IT, LV, PL, CY
Low	IE	ES, SI, HR, HU, RO, BG

Notes: in this case two major differences arise: EE, SK, LT and CZ, high in the GDP approach, but low in the per capita perspective; and IE with the contrary case.

Source: own elaboration.