Investments in R&D and innovative behavior: an exploratory cross-country study
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Investments in R&D and innovative behavior: an exploratory cross-country study Albert N. Link 1 Accepted: 3 November 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract The relationship between investments in research and development (R&D) and innovative behavior, measured in terms of new products or services being delivered to the market, is well documented in the literature. This paper departs from the extant literature in that the unit of observation is a country rather than a firm. Using World Bank aggregate data, this level of analysis thus allows for a systematic study of crosscountry observations on an R&D ➔ Innovation relationship. Keywords R&d . Innovation . Developed economy . Transition economy . Developing
economy JEL codes O31 . O32 . O57
Introduction The relationship between investments in research and development (R&D) and innovative behavior, measured in terms of new products or services being delivered to the market, is well documented in the literature (Audretsch and Link, 2018a, 2018b; Bednar et al., 2019; Boles and Link, 2017; Gicheva and Link, 2016; Link et al., 2020; Link and Ruhm, 2009; Link and Scott, 2009, 2010; Protogerou et al. 2017). In fact, as Link and Cunningham (forthcoming) argue, the key technology policy target variable, and technology policy is at the root of policies to foster innovation, is investments in R&D. In this paper, I depart from the extant literature in that the unit of observation is a country rather than a firm. This level of aggregation thus allows for a systematic study An investment in knowledge pays the best interest. —Benjamin Franklin
* Albert N. Link [email protected]
1
Department of Economics, University of North Carolina at Greensboro, Greensboro, USA
International Entrepreneurship and Management Journal
of cross-country observations, by the extent of their development, on an R&D ➔ Innovation relationship. The data that I use for this study comes from the World Bank Enterprise Surveys of countries1:
An Enterprise Survey is a firm-level survey of a representative sample of an economy’s private sector. The surveys cover a broad range of business environment topics including access to finance, corruption, infrastructure, crime, competition, and performance measures. Since 2005-06, nearly all data collection efforts have been centralized within the Enterprise Analysis Unit, where a Global Methodology was developed and applied ever since. To date, over 164,000 interviews in 144 countries have taken place … More specifically, I rely on the population of 40 country reports in which information is aggregated and summarized on variables related to each country’s investments in R&D and dimensions of innovation behavior.2 The dimensions of innovative behavior that I consider are per se innovation, referring to the introduction of a new-to-the-firm product/service and the introduction of a new-to-the-market product/service. Other scholars have studied, using the World Bank firm-level data, new-to-the-firm innovative behavior with
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