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Is the most innovative firm in the world really innovative?

Author

Listed:
  • Jiří Mihola
  • Petr Wawrosz
  • Jana Kotěšovcová

Abstract

The essence of knowledge economics is a permanent innovation process and the implementation of intense development factors. Decision-making about innovation is strategic and crucial. It is thus useful to have a sufficiently universal, practicable, and clear analysis of how successful a particular innovation is. Our paper suggests a method for evaluating process and organizational innovation which does not require a great amount of input information, only data about company costs and revenues, which are, at least for the company management, easily accessible. The outputs of the method are the values of the dynamic parameter of intensity and the dynamic parameter of extensity. The first one evaluates the share of change in intensive factors on a firm’s development, whereas the second one fulfils the same function for change in extensive factors. The sum of both parameters equals 1, or 100 % in percentage terms. The parameters are able to describe all possible types of firm development, which are summarized in the paper. The proposed methodology is applied to Nike, whose performance is compared to six other prominent, innovative U.S. companies (Amazon, Apple, Coca Cola, Google, Ford Motor Company, and Target). Our analysis, however, shows that the development of most of them is based on extensive factors. The most intensive firm is the Ford Motor Company, where growth in intensive factors offsets and even outweighs the decline in extensive factors. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Jiří Mihola & Petr Wawrosz & Jana Kotěšovcová, 2015. "Is the most innovative firm in the world really innovative?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(1), pages 41-54, March.
    • Handle: RePEc:kap:iaecre:v:21:y:2015:i:1:p:41-54:10.1007/s11294-014-9512-x
    DOI: 10.1007/s11294-014-9512-x
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Company productivity; Efficiency; Process and organizational innovation; Intensity; Extensity; G30; M21; O10; O40; C33;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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