Using DEA to Evaluate R&D Performance of the Computers and Peripherals Firms in Taiwan

By Chen, Chin-Tai; Chien, Chen-Fu et al. | International Journal of Business, Fall 2004 | Go to article overview
Save to active project

Using DEA to Evaluate R&D Performance of the Computers and Peripherals Firms in Taiwan

Chen, Chin-Tai, Chien, Chen-Fu, Lin, Ming-Han, Wang, Jung-Te, International Journal of Business


Research & development (R&D) performance has been a competitive advantage for high-tech industries. This paper presents an empirical study in which we used Data Envelopment Analysis (DEA) to evaluate the R&D performance of 31 computers and peripherals firms located at Hsinchu Science-based Industrial Park in Taiwan. We found that the R&D performance is very different among the evaluated companies, though most of the companies are technically efficient. Moreover, we discussed possible directions for the inefficient companies to improve their R&D performance. In particular, we found that most of the inefficient companies should increase their scales to increase their relative efficiencies of R&D performance.

JEL: C44, C67, M11

Keywords: R&D performance; High-tech industry; Efficiency; Data envelopment Analysis; Hsinchu Science-based Industry Park


New technologies and business models have had profound effect on how products and services are created and delivered, in particular as to the innovation, contents, delivery methods, systems, enabling technologies and management. The new information economy has been forcing high-tech companies to compete with each other through increasing R&D performance and decreasing cost simultaneously. An effective R&D operation is a major source of competitive advantage in today's rapidly globalizing economy. Thus, the evaluation of research & development (R&D) performance has been an important problem of both academic interest and practical need. To make decisions on R&D activity should be based on economic considerations more strongly, in order to estimate the opportunity cost and revenues of in-house R&D and to take these into account in costing (Brockhoff, 1998). In an exploratory investigation into R&D management practices, Cooper et al. (1997a, 1997b) conducted interviews in 35 leading firms in various industries and found the following key problems:

1) The portfolio of funded projects does not reflect the business strategy. There are disconnects between spending breakdowns on projects and the strategic priorities of the business.

2) The quality of R&D portfolio is poor. The success rates of funded projects are inadequate.

3) The Go/Kill decision points are weak. Funded projects tend to take on a life of their own.

4) There is a lack of R&D focus. Most firms confess to having too many projects for the limited resources available.

5) Some firms admitted to having too many trivial projects, i.e., modifications, updates and extensions, but too few projects to yield major breakthroughs and competitive advantage.

The computers and peripherals industry has been one of the most important components of the high-tech manufacturing industries worldwide. High-tech industry has the nature of high risks and high investment rewards. Because of the required creativity and innovation involved in R&D activities, evaluating R&D performance has been a difficult task. However, most of the managers of the high-tech companies rely on their experiences to evaluate R&D activities. In particular, the managers can hardly specify which factors contributing more or less to the R&D efficiency. Therefore, the managers do not know which factors they should enhance to increase the R&D performance of their companies. There are a number of R&D related studies on the selection of R&D projects (Chien, 2002), measuring R&D processes (Drongelen and Bilderbeek, 1999) the factors that affect R&D results (Brockhoff 1998; Morbey and Reithner, 1990) and measuring R&D performance (Brockhoff, 1998; Bilderbeek, 1999; Morbey and Reithner, 1990; Brown and Svenson, 1998; Gold, 1989; Werner and Souder, 1997). However, little research has been done on evaluating the relative efficiencies of R&D performances in the high-tech firms.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Using DEA to Evaluate R&D Performance of the Computers and Peripherals Firms in Taiwan


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?