Analyzing R&D efficiency in Asia and the OECD: An application of the Malmquist Productivity Index

Abstract

In recent years, there has been a growing interest in R&D efficiency among scholars and policy makers across the world. Several Asian countries have shown remarkable progress in R&D efficiency which seems to be at the cost of the leading nations like USA and the UK. This study investigates R&D efficiency in 22 countries, 20 of them members of the OECD, and the Russian Federation and China. The analysis is carried out using the Malmquist Productivity Index for the periods 2002–04 and 2004–06. The R&D inputs taken are gross domestic expenditure on R&D and the number of full-time researchers per million population. The outputs taken are patents granted to residents and the number of scientific publications indexed in the Science Citation Index. We find that China exhibits a rapid increase in number of scientific publications while the Republic of Korea shows exemplary performance in patenting among residents in recent years. Thus we confirm the results of some earlier studies, and contribute mainly by investigating R&D efficiencies using the MPI which is especially useful in comparing productivity in multiple decision making units over periods of time, and examining reasons for the efficiencies of China and the Republic of Korea. The results indicate significant improvements in technical capabilities of the residents of China and the Republic of Korea.