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 cross-country observations on an R&D ➔ Innovation relationship.
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Notes
See https://www.enterprisesurveys.org/en/about-us (accessed October 14, 2020). The aggregated country statistics are based on a stratified random sample of firms within the country.
Forty-three (43) country reports present aggregated information on the R&D and innovation variables relevant to this study, but 3 of those reports do not contain information on a key independent variable and thus they are dropped from the analyses that follow.
Schumpeter (1939, p. 62) defined innovation with reference to the production process which “describes the way in which quantity of product varies if quantities of factors vary. If instead of quantities of factors, we vary the form of the function, we have an innovation.”
The World Bank uses the word enterprise when referring to these studies although the survey questions use the word firm.
“Since there is no established convention for the designation of “developed” and “developing” countries or areas in the United Nations system, this distinction is made for the purposes of statistical analysis only.” See United Nations (2005, p. 43). “In the World Development Indicators database (and most other time series datasets), all 189 World Bank member countries, plus 28 other economies with populations of more than 30,000, are classified so that data users can aggregate, group, and compare statistical data of interest, and for the presentation of key statistics. The main classifications provided are by geographic region, by income group, and by the operational lending categories of the World Bank Group.” See https://datahelpdesk.worldbank.org/knowledgebase/articles/378834-how-does-the-world-bank-classify-countries (accessed October 15, 2020).
In cross-firm studies one might also control for the industry(ies) in which the firm produces. While it would be useful to have had data from the World Bank on the major industry or industries in which firms produce, such information is not available in the country reports. See Goel (1990).
Some country-specific technology studies have been done using the World Bank’s data. See https://www.enterprisesurveys.org/en/enterprise-research (accessed October 16, 2020).
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Link, A.N. Investments in R&D and innovative behavior: an exploratory cross-country study. Int Entrep Manag J 17, 731–739 (2021). https://doi.org/10.1007/s11365-020-00703-9
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DOI: https://doi.org/10.1007/s11365-020-00703-9