SME efficiency in transforming regional business research and innovation investments into innovative sales output

ABSTRACT

Based on data provided by the Regional Innovation Scoreboard on 23 capital and 184 non-capital regions in Europe, slacks-based models of data envelopment analysis (DEA) reveal that the efficiency by which business research and innovation inputs are converted at regional-level aggregated innovative sales output in small and medium-sized enterprises was significantly lower in capital regions in the period 2006–14. In view of efficiency maximization, a majority of the capital regions overinvest in non-research and development innovation activities, are over-specialized in knowledge-intensive industries, and fall behind in converting research and innovation inputs in intermediary intellectual property outcomes.

KEYWORDS:

• capital regions
• research and innovation
• efficiency
• small and medium-sized enterprises
• slacks-based data envelopment analysis (DEA)

JEL:

• O30
• R10

ACKNOWLEDGEMENTS

The authors are in particular grateful to André Spithoven and two anonymous reviewers for their constructive and valuable feedback on earlier drafts of this paper. The usual disclaimers apply.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. See https://stip.oecd.org/stip.html (accessed March 2020).

2. See https://stip.oecd.org/stip.html (accessed March 2020).

Additional information

Funding

The research on which this paper draws was funded by KU Leuven [grant number BOF/STG/14/009].