Abstract
The aim of this study is to determine whether funds spent on research and development are used efficiently in Association of Southeast Asian Nations (ASEAN) countries. Fifteen countries in the 2000-2016 period have been examined. Measuring the efficiency of research and development spending was performed using the non-parametric Data Envelopment Analysis (DEA) methodology, which allows for the assessment of input–output efficiency. The research includes the following input and output variables: annual public and private spending on innovation, high-technology exports as a percentage of manufactured exports, patent applications to the World Intellectual Property Organisation (WIPO) by priority year for million inhabitants, trademark applications (TA) for million inhabitants and information and communications technology (ICT) exports as a percentage of manufactured exports. Hong Kong and the Philippines are perhaps the most efficient with respect to research and development (R&D) when analysed using the constant return to scale (CRS) approach. However, according to the variable return to scale (VRS) approach, the most efficient ASEAN countries are Hong Kong, Indonesia, Singapore and the Philippines. The study also confirms that increased spending on innovation is resulting in non-proportional effects.
Highlights
The importance of innovation in shaping economic growth is fundamental to new growth theory, which assumes that long-term growth can be achieved through endogenous technological progress [1]
The main research method used in this study is the Data Envelopment Analysis (DEA) methodology, which is a nonparametric method that relies on linear programming benchmarking to assess the relative efficiency of decision-making units (DMUs) with multiple outputs and multiple inputs
The analysis showed that among the Association of Southeast Asian Nations (ASEAN) countries, the closest to being an efficiency frontier using the constant return to scale (CRS) approach are Indonesia, Thailand and Singapore, with Vietnam and Malaysia being less efficient
Summary
The importance of innovation in shaping economic growth is fundamental to new growth theory, which assumes that long-term growth can be achieved through endogenous technological progress [1]. This theoretical concept has been confirmed in numerous empirical studies [2,3,4,5]. Governments focus on the development of innovation policies and strategies This strategy assumes a steady increase in R&D spending; such spending does not necessarily go hand-in-hand with the efficient use of such funding. Such inefficiency may be one of the reasons for the deepening innovation gap
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