Innovation efficiency and the impact of the institutional quality: a cross-country analysis using the two-stage meta-frontier dynamic network DEA model

Abstract

Improving the development of science and technology through innovation is the core of a country's economic development. This study employed the two-stage meta-frontier dynamic network DEA model to explore the innovation efficiency from the R&D resources to charges received for the use of intellectual property and high-technology exports in 34 high-income and 23 middle-income countries from 2013 to 2017. We calculated the overall efficiency scores and the technology gap ratios of each country and the scores of input and output variables in the research and development (R&D) stage and marketing stage. The results showed that the average overall efficiency scores of middle-income countries were higher than those of high-income countries from 2013 to 2015, but the five-year total score of high-income countries was higher. The R&D efficiency scores were higher in middle-income countries, while the marketing efficiency scores were higher in high-income countries. In the R&D stage, the scores of all input and output variables were higher in middle-income countries but in the marketing stage, the scores of the output variables in high-income countries were obviously higher. High-quality institution can help improve the innovation efficiency in both high-income and middle-income countries. The efficiency improvements are higher in high-income countries during the R&D stage and higher in middle-income countries during the marketing stage. Therefore, both high-income and middle-income countries should strengthen institutional construction in order to improve the efficiency of innovation. And the researches in middle-income countries should pay more attention to local practical issues and their solutions.