Is There a Difference in Innovation Performance Depending on the Investment in Each Stage of Development Process? Evidence From Medical Device Industry

Though innovation is essential to achieve competitiveness in the medical device industry, it is difficult for most firms in developing countries to invest sufficient resources in research and development (R&D) activities due to their small firm size. Therefore, it is necessary to evaluate a company’s R&D performance based on the R&D efficiency, which is R&D output to input, rather than the output itself. Although medical device development (MDD) process in the medical device industry is divided into several stages, moreover, the impact of R&D activities in each MDD stage on R&D performance is still unanswered. This study verifies the difference in R&D efficiency according to three business types: both manufacturing and import, manufacturing only, and import only. The effect of the R&D activities in each MDD phase on R&D efficiency is also verified. The results prove that import-only companies tend to achieve higher level of R&D efficiency than firms engaging in manufacturing-only or both manufacturing and import. However, the difference in R&D efficiency between manufacturing-only companies and both manufacturing and import companies has not been verified. Furthermore, it is also verified that the impact of investment in each MDD stage on R&D efficiency varies depending on business types.