Skip to main content
SpringerLink
Log in

Supply chain constraints and research spending: an international investigation

  • Published:
The Journal of Technology Transfer Aims and scope Submit manuscript

Abstract

Supply chain issues have garnered considerable attention during recent years, especially with the advent of the COVID-19 pandemic. Whereas many causes and effects of supply chains have been studied, this paper focuses on an aspect that has largely been ignored—the effects of supply chain constraints on research and development (R&D) spending. Using cross-country data from numerous countries over the past decade, we find support for our main hypothesis that supply chain constraints undermine R&D spending. However, different dimensions of the supply chain have quantitatively different effects on research spending. Interestingly, we find evidence of the legacy of supply chain issues from pre-pandemic days to impact more recent R&D spending. Finally, the main findings are robust to consideration of reverse causality issues. Implications for technology policy are discussed.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. (https://www.flightglobal.com/aerospace/no-relief-from-supply-chain-malaise-any-time-soon-rolls-royce-chief/154409.article;

    https://www.joc.com/article/hot-summer-turning-climate-change-heat-supply-chains_20230802.html;

    https://www.defenseone.com/business/2023/08/supply-chains-have-stabilized-certain-parts-remain-hard-get-ceo/389114/;

    https://www.reuters.com/business/autos-transportation/fisker-records-first-quarterly-revenue-vehicle-sales-2023-08-04/).

  2. Branco et al. (2023) provide a careful analysis of the adverse effects of transport cost shocks on firm performance and firm behavior. They do not consider R&D spending, however.

  3. Rashidi and Cullinane (2019) also provide a critique of the LogisticsPERF index.

  4. Recall that higher values of the logistics variables imply better logistics performance – Table 1.

  5. We double-checked the data to see whether there was any double-counting between Investment and R&D. Despite the lack of apparent overlap, some nations might be counting regular investment as R&D and vice versa.

  6. Using appropriate caution in interpreting relative index scores, we see that the mean on overall globalization index is greater than that of its components (Table 2).

  7. A part of the reason for the insignificance of the effect of lending rate might be that in some nations, R&D is partially subsidized, at least in some target sectors/projects, and firms do not face the full effects of prices or interest rates.

  8. The low statistical significance could partly be due to the relatively small sample size (due to missing observations) in Table 6.

References

  • Alfano, V., Capasso, S., Ercolano, S., & Goel, R. K. (2022). Death takes no bribes: Impact of perceived corruption on the effectiveness of non-pharmaceutical interventions at combating COVID-19. Social Science & Medicine, 301, 114958. https://doi.org/10.1016/j.socscimed.2022.114958

    Article  Google Scholar 

  • Baum, C. F., Schaffer, M. E., & Stillman, S. (2007). Enhanced routines for instrumental variables/generalized method of moments estimation and testing. The Stata Journal, 7(4), 465–506.

    Article  Google Scholar 

  • Bernard, A. B., & Jensen, J. B. (2004). Why some firms export. Review of Economics and Statistics, 86(2), 561–569.

    Article  Google Scholar 

  • Branco, C., Dohse, D. C., dos Santos, J. P., & Tavares, J. (2023). Nobody’s gonna slow me down? The effects of a transportation cost shock on firm performance and behavior. Journal of Urban Economics, 136, 103569.

    Article  Google Scholar 

  • Cohen, W. M., & Levin, R. C. (1989). Empirical studies of innovation and market structure. In R. Schmalensee & R. Willig (Eds.), Handbook of industrial organization (Vol. 1, pp. 1059–1107) Chapter 18. North-Holland.

  • Czarnitzki, D., & Toole, A. A. (2013). The R&D investment-uncertainty relationship: Do strategic rivalry and firm size matter? Managerial and Decision Economics, 34(1), 15–28.

    Article  Google Scholar 

  • De Loecker, J. (2013). Detecting learning by exporting. American Economic Journal: Microeconomics, 5(3), 1–21.

    Google Scholar 

  • Dixit, A. (1995). Irreversible investment with uncertainty and scale economies. Journal of Economic Dynamics and Control, 19(1–2), 327–350.

    Article  Google Scholar 

  • Dixit, A. K., & Pindyck, R. S. (1994). Investment under uncertainty. Princeton University Press.

    Book  Google Scholar 

  • Dohse, D., & Niebuhr, A. (2018). How different kinds of innovation affect exporting. Economics Letters, 163, 182–185.

    Article  Google Scholar 

  • Faria, J. R., Goel, R. K., & Nelson, M. A. (2023). Does capacity utilization crowd-out research activity? Cross-national evidence from firm-level data. Managerial and Decision Economics (forthcoming). https://doi.org/10.1002/mde.3986

  • Goel, R. K. (1990). The substitutability of capital, labor, and R&D in U.S. manufacturing. Bulletin of Economic Research, 42(3), 211–227.

    Article  Google Scholar 

  • Goel, R. K. (2001). R&D effects of incomplete procurement contracts. Applied Economics Letters, 8(11), 697–699.

  • Goel, R. K. (2009). Technological complementarities, demand, and market power. NETNOMICS, 10(2), 161–170.

    Article  Google Scholar 

  • Goel, R. K., Göktepe-Hultén, D., & Nelson, M. A. (2023). Drivers of international research spending. Annals of Science and Technology Policy, 7(1), 1–80.

    Article  Google Scholar 

  • Goel, R. K., Mazhar, U., & Saunoris, J. W. (2021a). Identifying the corrupt cog in the wheel: Dimensions of supply chain logistics and cross-country corruption. Australian Economic Papers, 60(4), 693–709.

    Article  Google Scholar 

  • Goel, R. K., Nelson, M. A., & Goel, V. Y. (2021b). COVID-19 vaccine rollout—scale and speed carry different implications for corruption. Journal of Policy Modeling, 43(3), 503–520.

    Article  Google Scholar 

  • Goel, R. K., & Ram, R. (1994). Research and development expenditures and economic growth: A cross-country study. Economic Development and Cultural Change, 42(2), 403-411,

  • Goel, R. K., & Ram, R. (2001). Irresistibility of R&D investment and the adverse effect of uncertainty: Evidence from OECD countries. Economics Letters, 71(2), 287-291.

  • Goel, R. K., Saunoris, J. W., & Goel, S. S. (2021c). Supply chain performance and economic growth: The impact of COVID-19 disruptions. Journal of Policy Modeling, 43(2), 298–316.

    Article  Google Scholar 

  • Golev, A., Scott, M., Erskine, P. D., Ali, S. H., & Ballantyne, G. R. (2014). Rare earths supply chains: Current status, constraints and opportunities. Resources Policy, 41, 52–59.

    Article  Google Scholar 

  • Golgeci, I., & Ponomarov, S. Y. (2013). Does firm innovativeness enable effective responses to supply chain disruptions? An empirical study. Supply Chain Management, 18(6), 604–617.

    Article  Google Scholar 

  • Gulen, H., & Ion, M. (2016). Policy uncertainty and corporate investment. The Review of Financial Studies, 29(3), 523–564.

    Google Scholar 

  • Haruna, S., & Goel, R. K. (2011). R&D, free entry, and social inefficiency. Economics of Innovation and New Technology, 20(1), 89–101.

    Article  Google Scholar 

  • Hoang, K., Arif, M., & Nguyen, C. (2022). Corporate investment and government policy during the COVID-19 crisis. International Review of Economics & Finance, 80, 677–696.

    Article  Google Scholar 

  • Ibáñez, M. J., Guerrero, M., Yáñez-Valdés, C., & Barros-Celume, S. (2022). Digital social entrepreneurship: The N-Helix response to stakeholders’ COVID-19 needs. Journal of Technology Transfer, 47, 556–579. https://doi.org/10.1007/s10961-021-09855-4

    Article  Google Scholar 

  • Jones, C. I. (1995). R&D-based models of economic growth. Journal of Political Economy, 103(4), 759–784.

    Article  Google Scholar 

  • Kamien, M. I., & Schwartz, N. L. (1982). Market structure and innovation. Cambridge University Press.

    Google Scholar 

  • Kim, H., & Kung, H. (2017). The asset redeployability channel: How uncertainty affects corporate investment. The Review of Financial Studies, 30(1), 245–280.

    Article  Google Scholar 

  • Lachenmaier, S., & Wößmann, L. (2006). Does innovation cause exports? Evidence from exogenous innovation impulses and obstacles using German micro data. Oxford Economic Papers, 58(2), 317–350.

    Article  Google Scholar 

  • Melitz, M. J. (2003). The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.

    Article  Google Scholar 

  • Nelson, R. R. (1959). The economics of invention: A survey of the literature. The Journal of Business, 32(2), 101–127.

    Article  Google Scholar 

  • Parast, M. M. (2020). The impact of R&D investment on mitigating supply chain disruptions: Empirical evidence from U.S. firms. International Journal of Production Economics, 227, 107671.

    Article  Google Scholar 

  • Pavitt, K. (1984). Sectoral patterns of technical change: Towards a taxonomy and a theory. Research Policy, 13(6), 343–373.

    Article  Google Scholar 

  • Rashidi, K., & Cullinane, K. (2019). Evaluating the sustainability of national logistics performance using Data Envelopment Analysis. Transport Policy, 74, 35–46.

    Article  Google Scholar 

  • Reinganum, J. F. (1989). The timing of innovation: Research, development, and diffusion. In R. Schmalensee & R. Willig (Eds.) Handbook of industrial organization (Vol. 1, Chapter 14, pp. 849–908). Elsevier.

  • Richey, R. G., Roath, A. S., Adams, F. G., & Wieland, A. (2022). A responsiveness view of logistics and supply chain management. Journal of Business Logistics, 43(1), 62–91.

    Article  Google Scholar 

  • Salomon, R. M., & Shaver, J. M. (2005). Learning by exporting: New insights from examining firm innovation. Journal of Economics & Management Strategy, 14(2), 431–460.

    Google Scholar 

  • Saura, J. R., Palacios-Marqués, D., & Ribeiro-Soriano, D. (2023). Leveraging SMEs technologies adoption in the Covid-19 pandemic: A case study on Twitter-based user-generated content. Journal of Technology Transfer,, 48, 1696-1722. https://doi.org/10.1007/s10961-023-10023-z

    Article  Google Scholar 

  • Simangunsong, E., Hendry, L. C., & Stevenson, M. (2012). Supply-chain uncertainty: A review and theoretical foundation for future research. International Journal of Production Research, 50(16), 4493–4523.

    Article  Google Scholar 

  • Singh, S., Kumar, R., Panchal, R., & Tiwari, M. K. (2021). Impact of COVID-19 on logistics systems and disruptions in food supply chain. International Journal of Production Research, 59(7), 1993–2008.

    Article  Google Scholar 

  • Stock, J. H., & Yogo, M. (2005). Testing for weak instruments in linear IV regression. In D. W. K. Andrews & J. H. Stock (Eds.), Identification and inference for econometric models: Essays in Honor of Thomas Rothenberg (pp. 80–108). Cambridge University Press.

    Chapter  Google Scholar 

  • Tang, C. F., & Abosedra, S. (2019). Logistics performance, exports, and growth: Evidence from Asian economies. Research in Transportation Economics, 78, 100743.

    Article  Google Scholar 

  • Van Der Vorst, J. G., & Beulens, A. J. (2002). Identifying sources of uncertainty to generate supply chain redesign strategies. International Journal of Physical Distribution & Logistics Management, 32(6), 409–430.

    Article  Google Scholar 

  • World Economic Forum. (2008). Global risks 2008. World Economic Forum.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Kiel Institute for the World Economy, Kiel, Germany

    Dirk Dohse & Rajeev K. Goel

  2. Institute for Studies on the Mediterranean/National Research Council, Napoli, Italy

    Rajeev K. Goel

  3. Illinois State University, Normal, IL, USA

    Rajeev K. Goel

  4. Eastern Michigan University, Ypsilanti, MI, USA

    James W. Saunoris

Authors
  1. Dirk Dohse
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Rajeev K. Goel
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. James W. Saunoris
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Rajeev K. Goel.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

See.Tables 7, 8 and 9.

Table 7 Correlation matrix of key variables
Full size table
Table 8 List of sample countries
Full size table
Table 9 Supply logistics performance and R&D spending: Considering the effect of GDPpc
Full size table

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dohse, D., Goel, R.K. & Saunoris, J.W. Supply chain constraints and research spending: an international investigation. J Technol Transf (2023). https://doi.org/10.1007/s10961-023-10044-8

Download citation

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s10961-023-10044-8

Keywords

JEL Classification

Search

Navigation