R&D expenditure in the EU: convergence or divergence?

Abstract

This article examines the convergence of the R&D expenditure in the EU28 for 2004–2015. We initially run a sigma convergence analysis and the results show convergence in the total expenditure, due to the behaviour of the business and higher education sectors, despite government sector divergence. However, noticeable differences between the EU15 and 13 EU countries are apparent. The business enterprise sector is the main driver of EU15 R&D convergence, whereas for the EU13 this role is played by the government expenditure. In addition, the economic crisis has impacted differently on both groups. The club convergence approach allows us to explore these insights through individualized analysis and clusterization. Results for the EU28 show two clubs for the total expenditure, but the analysis of its components reveals a larger grouping. Our results evidence the necessity of revising the EU R&D policies towards greater coordination and resources, and the implementation of new instruments, due to the impact of this expenditure on growth, development and integration.