Services Innovation and Economic Performance An analysis at the firm level
AbstractWe present a model that links innovation effort to economic performance, along the lines of the Crépon et al (1998) model. However, in contrast to Crépon et al, that analyze R&D intensive manufacturing sectors, the present application examines the relationship between innovation and performance for services sectors. This is relevant since much effort has been made to explore that relationship for manufacturing but very little is known about it in the case of services sectors. In trying to fulfill this gap the paper uses firm-level data from the Second Community Innovation Survey to estimate a simultaneous equations model for firms in ten services sectors in Portugal. The present model also differs from former approaches by the specific explanatory structure proposed to estimate the complex relationship between innovation and economic performance. Instead of estimating a direct link between innovation and labor productivity, three specific relationships were put forward. The first of them explains the innovation effort intensity (an input in the innovation process). The second one relates service innovation (an output of the innovation process) to effort intensity and to other explanatory variables. Finally, the third relationship links labor productivity to both service innovation and effort intensity considering also some other influences. Sensitivity analysis of the results to alternative estimation techniques was performed.
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Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 05-08.
Date of creation: 2005
Date of revision:
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Web page: http://www.druid.dk/
Innovation and performance; Innovation in services; Technology; Service sectors; Labor productivity; CIS;
Find related papers by JEL classification:
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- L8 - Industrial Organization - - Industry Studies: Services
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-08-20 (All new papers)
- NEP-BEC-2005-08-20 (Business Economics)
- NEP-EFF-2005-08-20 (Efficiency & Productivity)
- NEP-INO-2005-08-20 (Innovation)
- NEP-MIC-2005-08-20 (Microeconomics)
- NEP-TID-2005-08-20 (Technology & Industrial Dynamics)
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- Priit Vahter & Jaan Masso, 2011.
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