Efficiency and advantage of government-sponsored R&D projects: An inter-industry comparison

In this study, data envelopment analysis (DEA) was applied to investigate the relative efficiencies of government-sponsored R&D projects (GSPs) in different industries in Taiwan. The longitudinal data of 110 GSPs belonging to 4 distinctive industries between 1997 and 2005 were examined. Empirical results showed that aggregated efficiency, technical efficiency and scale efficiency in different industries were significantly different. Besides, we present a Two-Model approach that allows decision-makers to evaluate two models simultaneously-one technical efficiency of intellectual property (IP)-based measures and the second one of application (AP)-based measures. This new method selects only DMUs that are efficient in both IP-based and AP-based measures to be members of the benchmark set. This study show that the two-model approach DEA method of analysis can better indicate managerial efficiency and can help the policy maker at various stages to understand their specific advantages and disadvantages more thoroughly and clearly. This will aid each GSP in the industry to gain a greater understanding of the gap between the outputs of GSPs and improve their operational efficiency by providing future operational strategies analysis.