Research and development inputs and innovation performance of European Union economies
DOI:
https://doi.org/10.15584/nsawg.2024.1.3Keywords:
R&D inputs, innovativeness of economy, innovation performance, structural equation modelling, PLS-SEMAbstract
The paper discusses the issue of the innovativeness of European Union countries. The innovativeness of an economy is defined as the ability to create and implement innovations. The purpose of the research is to examine the strength and direction of the influence of R&D inputs on the innovation performance of EU economies. Innovation performance is one of two categories describing the innovativeness of the economy. It expresses the outcome stemming from a combination of society’s creativity and the financial assets of a given economic and institutional environment. In turn, R&D inputs are an important factor determining the innovation capacity, i.e. the extent to which an economy is capable of creating and commercialise new ideas. In the paper, R&D inputs are considered in two categories: financial capital and human capital. The main hypothesis to be verified is that R&D inputs have a positive, statistically significant impact on the innovation performance of the economy. PLS-SEM (partial least squares structural equation modelling) was used to achieve the research goal and verify the formulated hypothesis. PLS-SEM models were estimated based on cross-sectional data from 27 EU countries. The data related to three years: 2017, 2019 and 2021. The modelling results indicated that, in the analysed period, R&D inputs had a strong, positive, statistically significant impact on the innovation performance of the economies in EU countries. Both financial and human capital had a significant, positive impact on the innovation performance of the analysed economies, with financial capital being more important. The paper also ranks EU countries according to R&D inputs, financial and human capital, and the innovation performance of the economy.
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