Effects of R&D spending on innovation by Irish and foreign-owned businesses

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Doran, Justin
Jordan, Declan
O'Leary, Eoin
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Statistical and Social Inquiry Society of Ireland
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This paper estimates the private returns to four different kinds of R&D spending on the probability of Irish and foreign-owned businesses engaging in product, process and organizational innovation. By providing econometric analysis of the Community Innovation Survey: 2004 to 2006, it makes an important contribution to our understanding of the effects of Irish innovation policy, which has incentivized businesses to spend on R&D. The main findings are that Irish-owned businesses are significantly more likely than foreign-owned to introduce new products as a result of creative R&D work undertaken. Foreign-owned businesses, which spend nearly 6 times more per worker on R&D than Irish-owned, enjoy very high returns mostly from the purchase or licence of patents. This reflects a fundamental difference in the innovation activities of these businesses, which is critical for policymakers' understanding of the Irish innovation system.
Innovation policy , Innovation output , Research and development , Research & development
Doran, J., Jordan, D. and O'Leary, E. (2013) 'Effects of R&D spending on innovation by Irish and foreign-owned businesses', Journal of the Statistical and Social Inquiry Society of Ireland, Vol. XLII, 2013, pp. 15-41.