Lühikokkuvõte: This paper focuses on medical innovation, which has been gaining the importance in meeting current and future health challenges. The analysis covers the period of 2004-2018 and is conducted for 27 European Union countries divided according to the level of their innovativeness, and additionally Central and Eastern Europe (CEE) is analysed as a separate sub-group. We use patents per capita as a proxy for innovations and employing a dynamic panel analysis we model them as a function of international and domestic macroeconomic variables, government and private-sector R&D, the rate of return to physical and human capital, and a measure of risk. The results of the study extend knowledge about factors that determine innovative output of medical science and reveal the heterogeneity of the EU in this respect. The key finding is that higher exposure to external risk lowers medical innovation, especially in CEE and other EU countries that are weak innovators, while education drives innovation in these countries. These factors do not matter for strong innovators where the internal rate of return is the most important driver of innovations. The paper also proves that real-exchange-rate volatility reduces patent applications in medical sector for some countries, particularly in CEE.

Võtmesõnad: medical innovation; innovative capacity; sectoral innovation system; European Union; Central and Eastern Europe.

Kaasautor:
Scott W. Hegerty - Department of Economics, Northeastern Illinois University

The public research seminars of the Department of Economics and Finance (DEF) at Tallinn University of Technology  usually take place on the second and fourth Wednesdays of the month in both onsite and online format, unless announced otherwise. The presentation will last approximately 45 minutes followed by 15 minutes of discussion. The seminars are held in English. Copies of the paper are usually made available at the seminar. The DEF seminar series is organised in collaboration with the project ”Individual Behaviour and Economic  Performance: Methodological  Challenges and Institutional Context” (IBEP), which has received funding from the European Union’s Horizon 2020 Research and Innovation programme under Grant Agreement No 952574. Questions about the seminar can be sent to the IBEP seminar coordinator Kadri Männasoo, kadri.mannasoo@taltech.ee.