Evaluating R&D Efficiency of Selected European Countries: A Dynamic Analysis for Period 2007–2017

Abstract

This research deals with objectively measuring the (in)efficiency of R&D expenditures and innovation policies of 30 selected European countries for the period 2007–2017. Gaps in the existing literature in the forms of wright utilization of input and output variables, missing data problems, and observing dynamic changes over time are filled. Another objective of the study includes obtaining a ranking system based on several important variables that will correlate to the international rankings which are often publicized with a great time lag and based on many measures. Novelties of this research include: inclusion of relevant variables, conduction of a dynamic analysis which is often ignored in the literature, missing data is tackled, robustness checking of the results is performed which is also lacking in the previous existing literature and detailed policy recommendations are given. The main results indicate that a robust ranking was obtained, which is in line with international rankings.