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Complementarities Affecting the Returns to Innovation

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  • Jennifer Percival
  • Brian Cozzarin
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    Abstract

    The purpose of this paper is to determine which firm strategies, perceived benefits of innovation and objectives for innovating in various manufacturing industries are indeed complementary with innovation. The test for complementarity is performed by proving that the data satisfies a set of supermodularity parametric equation restrictions. Our estimation results, from Canada's national innovation survey, show a wide variation in complements affecting the perception of the value of innovation to a firm. In terms of profit, complementary variable pairs for world-first innovators exceed those of firms who report a Canada-first or firm-first innovation. With labour productivity, complementary variable pairs for the Canada-first innovators exceed those of the world- and firm-first innovators. It is readily apparent though, that a high-technology industry does not necessarily equate to a high degree of complementarity.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Industry and Innovation.

    Volume (Year): 15 (2008)
    Issue (Month): 4 ()
    Pages: 371-392

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    Handle: RePEc:taf:indinn:v:15:y:2008:i:4:p:371-392

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    Related research

    Keywords: Complementarity; strategy; innovation; objectives; impact;

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    Cited by:
    1. Giovanni Cerulli & Bianca Potì, 2013. "Managerial capacity in the innovation process and firm profitability," CERIS Working Paper 201301, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
    2. Doran, Justin, 2012. "Are different forms of innovation complements or substitutes?," MPRA Paper 44580, University Library of Munich, Germany.
    3. Massimiliano Mazzanti & Susanna Mancinelli & Marianna Gilli, 2014. "Innovation Complementarity and Environmental Productivity Effects: Reality or Delusion? Evidence from the EU," Working Papers 2014043, University of Ferrara, Department of Economics.
    4. Doran, Justin & Ryan, Geraldine, 2014. "Eco-Innovation – Does Additional Engagement Lead to Additional Rewards?," MPRA Paper 52797, University Library of Munich, Germany.
    5. Antonioli, Davide & Mancinelli, Susanna & Mazzanti, Massimiliano, 2013. "Is environmental innovation embedded within high-performance organisational changes? The role of human resource management and complementarity in green business strategies," Research Policy, Elsevier, vol. 42(4), pages 975-988.

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