Title: Do firm sizes matter for R&D efficiency: evidence for a stochastic metafrontier model
Author: Wen-Cheng Lu
Address: Department of Economics, Ming Chuan University, 5 De-Ming Rd, Gui-Shan Township, Taoyuan County 333, Taiwan
Abstract: This paper employs the concepts of metafrontier, group frontiers and technology gap ratio for the purpose of investigating differences in R&D efficiency across groups of firms. The study finds that R&D employees, physical capital, R&D expenditure and patent citations are important to produce patents. Large firms with more R&D manpower are associated with higher R&D efficiency. The estimated output elasticity for R&D expenditure input and physical capital input for large firms is higher than that for small firms. The estimated output elasticity for patent citation input in a large firm sample is slightly smaller than that in a small firm sample. Small firm groups are much closer to metafrontier than large firm groups. Small firms have higher R&D efficiency than large firms. The results provide new insights into R&D efficiency and the first step of policymaking to improve R&D environment.
Keywords: R&D efficiency; group frontiers; technology gap ratio; metafrontier; firm size; stochastic metafrontier models; R&D employees; physical capital, R&D expenditure; patent citations; patents; modelling.
Int. J. of Technology Intelligence and Planning, 2016 Vol.11, No.1, pp.36 - 50
Submission date: 27 Oct 2014
Date of acceptance: 08 Feb 2015
Available online: 18 Jan 2016