INDECS 19(2), 168-188, 2021 DOI 10.7906/indecs.19.2.1 Full text available in pdf and xml formats.

Received: 18thJanuary 2021. Accepted: 4thJune 2021. Regular article

ABSTRACT

The article deals with the problems of business innovation and inventions in the EU countries with a focus on the potential effects of business R&D expenditure. Since the business is considered an essential sector concerning innovation, business R&D expenditure can play a significant role in their creation. However, several obstacles hinder the successful transformation of R&D expenditures into invention or innovation. R&D expenditures as any other type of business investments are associated with a certain risk. In this case, the risk of failure can be even higher due to their long-term nature and complexity. The article aims at an examination of the short-run and long-run relationship between business R&D expenditure, on one hand, an invention, and innovation on the other. To achieve this, the tests of Granger causalities and panel cointegrated regression has been applied on macro-level data. Furthermore, the structure of R&D expenditure in EU countries has been also examined. The results suggest a positive correlation between business R&D expenditure and innovation activities as well as the positive causal effect of business R&D expenditure on patenting in the long run.

KEY WORDS
innovation, business R&D expenditure, invention, business innovation, patenting

CLASSIFICATION

JEL:	M21, O30, O31