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Openness and innovation--Home and export demand effects on manufacturing innovation: Panel data evidence for Ireland and Switzerland

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  • Woerter, Martin
  • Roper, Stephen

Abstract

Recent studies in the tradition of Schmookler have re-emphasised the potential role of demand in stimulating innovation. Here, we reconsider the role of 'home' and 'export' market demand in stimulating manufacturing innovation using comparable panel data for two small open economies - Ireland and Switzerland. Our analysis is based on the estimation of reduced form innovation production functions using panel data estimators over the sample period 1994-2005. For a range of innovation indicators, however, we find little evidence of any significant market demand effects, with innovation performance instead determined largely by firm-level capability effects and characteristics. In policy and strategy terms this suggests the continued value of measures to improve innovation capability regardless of market demand conditions. In more methodological terms our results suggest the validity of the usual assumption implicit in modelling innovation outputs that supply-side factors predominate.

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Bibliographic Info

Article provided by Elsevier in its journal Research Policy.

Volume (Year): 39 (2010)
Issue (Month): 1 (February)
Pages: 155-164

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Handle: RePEc:eee:respol:v:39:y:2010:i:1:p:155-164

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Web page: http://www.elsevier.com/locate/respol

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Keywords: Innovation Demand Ireland Switzerland;

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References

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  5. Gadi Barlevy, 2007. "On the Cyclicality of Research and Development," American Economic Review, American Economic Association, vol. 97(4), pages 1131-1164, September.
  6. repec:fth:inseep:9833 is not listed on IDEAS
  7. Mairesse ,Jacques & Mohnen,Pierre, 2001. "To Be Or Not To Be Innovative: An Exercise In Measurement," Research Memorandum 038, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  8. Hall, B. & Mairesse, J. & Branstetter, L. & Crepon, B., 1998. "Does Cash Flow cause Investment and R&D: An Exploration Using Panel Data for French, Japanese, and United States Scientific Firms," Economics Papers 142, Economics Group, Nuffield College, University of Oxford.
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  10. Janz, Norbert & Lööf, Hans & Peters, Bettina, 2004. "Firm Level Innovation and Productivity - Is there a Common Story Across Countries?," Working Paper Series in Economics and Institutions of Innovation 24, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  11. Wladimir Raymond & Pierre Mohnen & Franz Palm & Sybrand Schim van der Loeff, 2004. "An Empirically-Based Taxonomy of Dutch Manufacturing: Innovation Policy Implications," CESifo Working Paper Series 1230, CESifo Group Munich.
  12. Alessandro STERLACCHINI, 1998. "Do innovative activities matter to small firms in non-R&D-intensive industries? An application to export performances," Working Papers 109, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
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  15. Roper, Stephen & Love, James H., 2002. "Innovation and export performance: evidence from the UK and German manufacturing plants," Research Policy, Elsevier, vol. 31(7), pages 1087-1102, September.
  16. Edler, Jakob & Georghiou, Luke, 2007. "Public procurement and innovation--Resurrecting the demand side," Research Policy, Elsevier, vol. 36(7), pages 949-963, September.
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Citations

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Cited by:
  1. Martin Wörter, 2011. "Konjunktur und Innovationsverhalten von Schweizer Firmen," KOF Analysen, KOF Swiss Economic Institute, ETH Zurich, vol. 5(4), pages 55-71, December.
  2. Gersbach, Hans & Schneider, Maik & Schneller, Olivier, 2010. "Optimal Mix of Applied and Basic Research, Distance to Frontier, and Openness," CEPR Discussion Papers 7795, C.E.P.R. Discussion Papers.
  3. Chang, C-L. & McAleer, M.J. & Tang, J-T., 2013. "International Technology Diffusion of Joint and Cross-border Patents," Econometric Institute Research Papers EI 2013-24, Erasmus University Rotterdam, Erasmus School of Economics (ESE), Econometric Institute.

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