Do external risk factors increase or decrease country-level R&D efficiency: focused on air pollution and job insecurity?

Abstract

The national resources that can be used in the national innovation system are limited. Therefore, interest in R&D efficiency is increasing in terms of how well-limited resources are utilised to achieve innovation. This study analyzed the effects of external risk factors on a country's R&D efficiency using the DEA-Tobit regression model. Air pollution was set as an environmental risk, and job insecurity was selected as a social risk. The results showed a positive correlation between R&D efficiency and both risk factors. In the case of environmental risks, long-term R&D investments or technology development due to strong regulations have affected R&D efficiency. Social risks have served as motivation for high performance. This study provides implications that policymakers should consider the impact of risk on performance and manage it through organisation and monitoring.