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Innovation, Ownership and Profitability

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  • James H. Love
  • Stephen Roper
  • Jun Du

Abstract

This paper considers the relationship between innovation, ownership and profitability for a panel of manufacturing plants in Ireland and Northern Ireland. Previous literature suggests that innovators are persistently more profitable than non-innovators, but little is known about how this link is moderated by external versus domestic ownership. We consider the link between innovation and profits separately for innovators and non-innovators, and for indigenous innovators and non-innovators and externally-owned plants. We also consider the determinants of innovation over the distribution of plant-level profitability, and find that the determinants of profitability – including innovation and external ownership – vary over the distribution from low to high profitability plants. We find support for the view that innovators and non-innovators have different profitability determinants, and that the profitability of externally-owned plants depends on very different factors to that of indigenously-owned enterprises.

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Bibliographic Info

Paper 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 07-10.

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Date of creation: 2007
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Handle: RePEc:aal:abbswp:07-10

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Web page: http://www.druid.dk/

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Keywords: Innovation; Ownership; Profitability; Ireland; Northern Ireland;

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References

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  1. J. E. Birnie & D. M. W. N. Hitchens, 1998. "Productivity and Income Per Capita Convergence in a Peripheral European Economy: The Irish Experience," Regional Studies, Taylor & Francis Journals, vol. 32(3), pages 223-234.
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  3. Cassidy, Mark, 2004. "Productivity in Ireland: Trends and Issues," Quarterly Bulletin Articles, Central Bank of Ireland, pages 83-105, April.
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  25. repec:fth:inseep:9833 is not listed on IDEAS
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Citations

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Cited by:
  1. Stiebale, Joel, 2012. "Cross-Border M&A and Innovative Activity: Firm-Level Evidence," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62027, Verein für Socialpolitik / German Economic Association.
  2. Joel Stiebale, 2010. "The Impact of Foreign Acquisitions on the Investors‘ R&D Activities – Firm-level Evidence," Ruhr Economic Papers 0161, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Rosenbusch, Nina & Brinckmann, Jan & Bausch, Andreas, 2011. "Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs," Journal of Business Venturing, Elsevier, vol. 26(4), pages 441-457, July.
  4. Huang, Can & Wu, Yilin & Mohnen, Pierre & Zhao, Yanyun, 2013. "Government support, innovation and productivity in the Haidian (Beijing) District," MERIT Working Papers 058, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  5. Barrett, Alan & Kearney, Ide & O'Brien, Martin, 2008. "Quarterly Economic Commentary, Summer 2008," Forecasting Report, Economic and Social Research Institute (ESRI), number QEC20082.
  6. Christian Helmers & Mark Rogers, 2010. "Innovation and the Survival of New Firms in the UK," Review of Industrial Organization, Springer, vol. 36(3), pages 227-248, May.
  7. Mata, José & Woerter, Martin, 2013. "Risky innovation: The impact of internal and external R&D strategies upon the distribution of returns," Research Policy, Elsevier, vol. 42(2), pages 495-501.
  8. Stiebale, Joel & Reize, Frank, 2011. "The impact of FDI through mergers and acquisitions on innovation in target firms," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 155-167, March.
  9. Coad, Alex & Segarra Blasco, Agustí, 1958- & Teruel, Mercedes, 2013. "Innovation and firm growth: Does firm age play a role?," Working Papers 2072/211886, Universitat Rovira i Virgili, Department of Economics.

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