RELATIVE EFFICIENCY OF R&D IN EUROPEAN COUNTRIES

This paper assesses the relative efficiency of R&D in the European countries using a nonparametric DEA approach across a group of 34 European countries. R&D is important driver of economic growth and since the resources allocated for R&D are limited, their efficient usage becomes increasingly important. This is further emphasised nowadays where world is faced with global pandemic which lead to reallocation of large amount of businesses and activities online. Considering that countries do not have to be equally efficient in all aspects of R&D, overall model as well as two specialised models (patent oriented and article oriented) are presented. Results of this study indicate that more than one-half of observed countries are R&D inefficient. Additionally, countries are in general more efficient when it comes to article orientation, rather than when it comes to patent orientation. In stage 2 of the analysis, countries are clustered into three groups based on the efficiency results of two specialised models obtained in stage 1 in order to identify characteristics of selected European countries based on their R&D orientation. The findings from this research can serve policy makers from European countries in providing directions for required efforts to enhance R&D efficiency.