Business Spending on Research and Development and its Relationship to Invention and Innovation

  • Jan Hunady Faculty of Economics, Matej Bel University in Banska Bystrica, Slovakia
  • Peter Pisar Faculty of Economics, Matej Bel University in Banska Bystrica, Slovakia
Keywords: innovation, invention, business R&D expenditure, business innovation, patenting

Abstract

The paper deals with the problem of business spending on research and development and their relation to innovation activities. It is focused on R&D in the business sector as a crucial part of the innovation system. R&D expenditure can be seen as the main precondition of successful innovation. However, the successful transformation of R&D investment into invention or innovation cannot be guaranteed. Our main aim is to examine the relationship between business R&D expenditure, invention and innovation in the long-run. We also examine the level of business R&D expenditure in EU countries. The long-run causalities have been tested by using panel cointegration approach on the macro-level panel data for EU countries. The scope of inventions is proxied by the share of firms introducing product or service innovation as well as the number of patents registered. Based on our results, there appears to be a positive causal effect of business R&D expenditure on patenting in the long-run.

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Published
2020-09-22
How to Cite
Hunady, J., & Pisar, P. (2020). Business Spending on Research and Development and its Relationship to Invention and Innovation. Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (Online), 6(1), 542-552. Retrieved from https://proceedings.entrenova.org/entrenova/article/view/355
Section
Economic Development, Innovation, Technological Change, and Growth