Fukunari Kimura: To move up a development ladder from upper middle-income to high-income economy, a country must acquire innovation capabilities that are based on the accumulation of R&D activities. R&D is risky and expensive, however. Thus, it is important to assess inputs and outputs of R&D activities or “R&D efficiency.” Although this is not certainly an easy task, Chen, Lee, and Xu challenge a sort of R&D efficiency measurement with the firm-level data in Changzhou, China. In this paper, inputs are R&D expenditure or R&D workers, and outputs are the number of patent application or revenues from new products. Key results claimed here are that (1) high-tech firms with more internal R&D expenditure apply for more patents and (2) internal R&D is more efficient in foreign firms, followed by private firms and then SOEs.
Although the results of this paper are interesting and useful for developing the discussion on R&D...