To study the knowledge creation process, we introduce a conceptual framework that captures the major goals and features of research organizations. The knowledge efficiency of research groups is then empirically studied. The budget of the projects and size of the research groups are inputs of the projects. To make the assessment more reasonable, two-dimensional indicators, including a domestic impact factor and an international impact factor, are jointly used to evaluate the research outputs for Chinese research groups through a Data Envelopment Analysis approach with preferences. Through comparisons of groups with the highest and lowest efficiency, we discover the critical factors influencing productivity and efficiency of these research groups based on the proposed framework. Finally, we provide some management suggestions for research groups to improve their knowledge creation efficiency. © 2005 Wiley Periodicals, Inc.
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