International Technology Trade and
Innovation Efficiency:
A Cross-Country Study
Show-Ling Jang
Che-Jung Hsu
Tzu-Ti Lin
Department of Economics, National Taiwan University
Dar-Zen Chen
Department of Economics, National Taiwan University
Mu-Hsuan Huang
Department of Economics, National Taiwan University
Annual Paris Conference on “Money, Economy and Management”
July 2011
1. Introduction
2
Innovation
Technology
TFP
Economic
Improvement
Shock
Growth
Crucial For Every Nation!
3
Conventional Policy Making
Technological Improvement Depends On
R&D Expenditure
Researchers
Technicians
This neglects EXTERNAL sourcing!
Reference: Wang and Huang (2007); Sharma and Thomas (2008)
4
Measurement of External Sourcing:
Technology Balance of Payment (TBP)
TBP payments capture the firm’s
activities of importing the disembodied
technology,
while TBP receipts enable us to measure
the exportation of disembodied
technology through export
Reference: TBP Manual (1990); Hollanders (2008)
5
Reasonably Using TBP Data
However, TBP data has its limitations,
and sometimes can be misused.
Ex:
Some policy makers tend to merely
consider surplus or deficit of
technological trade when proposing
new policies
6
Our Research Purpose
I
• Proposing a reasonably framework for
policy makers to utilizing TBP data
II
• Conducting an innovation efficiency
measurement encompassing both
internal and external indicators
7
2. Technology Balance of Payment
8
Table1
TBP in 32 Countries
Note: * Original data are missing and have been filled in by linear interpolation of the closest years’ observations .
Source: OECD(2010)
9
TBP Analyses
Conventional
Surplus
Or
Deficit
Suggested
Total
Input TBP
Quantity
Share Flow
10
Table2
Ratio of TBP Receipts to Payments
Source: OECD(2010)
11
Table 3a
Top 5 Import Sources of Selected Countries
Source: International Economic Accounts; BEA; Indicators of S&T in Japan; MEXT.
12
Table 3b
Top 5 Export Destinations of Selected Countries
Source: International Economic Accounts; BEA; Indicators of S&T in Japan; MEXT.
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3. Innovation Efficiency
14
Data Envelopment Analysis (DEA)
DEA is a widely acknowledged linear
programming model for calculating
efficiency, even in cross-country studies.
Ex:
Rousseau and Rousseau (1997)
Wang and Huang (2007)
Sharma and Thomas (2008)
Reference: Charnes et al.(1994); Farrel(1957); Banker et al.(1984)
15
Chosen Variables
Input
Output
• R&D Expenditure
• TBP Payments
•
•
•
•
Patent Counts
H-index for Patents
Research Publications
TBP Receipts
16
Table 6
Descriptive Statistics of Variables in DEA
17
Empirical Results
I
• Canada, the US, Singapore, and Taiwan are
seen as nations which most efficiently allocate
their research resources in terms of innovation.
II
• After taking technological trade into
consideration, we have more accurate results.
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Table 7
Innovation Efficiency Scores in DEA
19
4. Conclusion
20
Concluding Remarks
I
• TBP is a both practical and convenient
indicator, on condition that we analyze and
interpret it properly
II
• Both internal and external indicators should
be taken into consideration when analyzing
national innovation efficiency
21
THANK YOU!
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