Inspect the Effects of Research and Development on Performance of Industries in OECD Countries Data Envelopment Analysis - Malmquist Productivity Index Approach

The competition among companies and industrial firms is getting more and more tense in the recent years, and one way for these firms to gain advantage over one another is by using Research and Development (R&D) sections. R&D is assumed to be a pathway for businesses to gather some knowledge for the purpose of creating new product, finding or even building new paths towards improvement of their former goods or services. Investments on R&D sections of companies is attracting more and more attention each year and so, a lot of researches has been done towards this matter. Some companies, dedicate more resources for this purpose in hope of getting more in return, but in this way, some resources may be falsely used as the effective ones; and this is what we focus on in this thesis by measuring the amount they have invested in different areas and the amount they receive in return. the group chosen for the intent of this evaluation is a group of 19 countries from OECD countries for the time period of 2013 to 2019. For this mentioned purpose, Introduction of “Malmquist Index” (MI), has attracted a lot of attention and it has grown as a standard method for evaluation of productivity over time. And also, cost efficiency which was introduced by Farrell, made Data Envelopment Analysis (DEA) a powerful tool for quantifying performances of different data sets; this fact, makes it perfect for process of evaluation of the countries which we are trying to compare. This DEA-Based MPI explains the productivity change of Decision-Making Units (DMUs) over the time period that is specified.