Staged efficiency and its determinants of regional innovation systems: a two-step analytical procedure

An efficiency-oriented analysis of regional innovation systems will enhance the public's understanding of their operational 'quality', help policymakers in benchmarking innovation performance, and thereby improve policymaking. This study proposes a coherent two-step analytical procedure for modelling the efficiency performance of regional innovation systems and its determinants. The first step of the procedure involves measuring efficiency associated with a sophisticated network data envelopment analysis model, which accounts for the linkages between the two disaggregated sub-processes, namely an upstream technological creation process (TCrP) and a downstream technological commercialisation process (TCoP), during a technological innovation process (TIP). The procedure simultaneously deals with overall TIP efficiency as well as the two component TCrP and TCoP efficiencies in a united framework. In the second step of the procedure, the paper examines the effects of policy-oriented environmental factors on the respective efficiency scores of the three processes (TIP, TCrP, and TCoP) associated with a flexible partial least squares regression. We apply the two-step hybrid analytical procedure to China's province-level regional innovation systems. Our empirical study shows that China's regional innovation systems perform poorly in both technological creation efficiency and technological commercialisation efficiency at the provincial average level. This awkward situation is attributed to unfavourable environmental factors. Our findings indicate that the embedded and contextualised policy-oriented environment does not effectively suit the TIP within China's regional innovation systems.