Measuring efficiency of innovation using combined Data Envelopment Analysis and Structural Equation Modeling: empirical study in EU regions

Kleoniki Kalapouti, Konstantinos Petridis, Chrisovalantis Malesios, Prasanta Kumar Dey

Research output: Contribution to journalArticle

Abstract

The main aim of this paper is to investigate the impact of patent applications, development level, employment level and degree of technological diversity on innovation efficiency. Innovation efficiency is derived by relating innovation inputs and innovation outputs. Expenditures in Research and Development and Human Capital stand for innovation inputs. Technological knowledge diffusion that comes from spatial and technological neighborhood stands for innovation output. We derive innovation efficiency using Data Envelopment Analysis for 192 European regions for a 12-year period (1995–2006). We also examine the impact of patents production, development and employment level and the level of technological diversity on innovation efficiency using Structural Equation Modeling. This paper contributes a method of innovation efficiency estimation in terms of regional knowledge spillovers and causal relationship of efficiency measurement criteria. The study reveals that the regions presenting high innovation activities through patents production have higher innovation efficiency. Additionally, our findings show that the regions characterized by high levels of employment achieve innovation sources exploitation efficiently. Moreover, we find that the level of regional development has both a direct and indirect effect on innovation efficiency. More accurately, transition and less developed regions in terms of per capita GDP present high levels of efficiency if they innovate in specific and limited technological fields. On the other hand, the more developed regions can achieve high innovation efficiency if they follow a more decentralized innovation policy.
Original languageEnglish
Pages (from-to)1-24
Number of pages24
JournalAnnals of Operations Research
Early online date15 Dec 2017
DOIs
Publication statusE-pub ahead of print - 15 Dec 2017

Bibliographical note

© 2017 Springer Publishing. This is a post-peer-review, pre-copyedit version of an article published in Annals of Operations Research. The final authenticated version is available online at: https://doi.org/10.1007/s10479-017-2728-4

Keywords

  • Technological diversity
  • R&D
  • Patents
  • Data Envelopment Analysis
  • Structural Equation Modeling

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