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Innovation and firm growth in "complex technology" sectors : a quantile regression approach

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Author Info
Alex Coad () (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)
Rekha Rao (LEM - Laboratory of Economics and Management - Sant'Anna School of Advanced Studies)

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Abstract

Innovation is commonly seen as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four «complex technology» sectors. The average firm, which experiences only modest growth, may grow for a number of reasons that may or may not be related to «innovativeness». However, given that firms are heterogeneous and that growth rates distributions are typically heavy-tailed, it may be misleading to use regression techniques that focus on the average firm. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of «superstar» fast-growth firms.

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Date of creation: Jun 2006
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Keywords: Innovation firm growth quantile regression.

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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. A. Coad & R. Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Econonmics and Evolution 2007-05, Max Planck Institute of Economics, Evolutionary Economics Group. [Downloadable!]
  2. Alex Coad & Rekha Rao, 2006. "Innovation and market value: a quantile regression analysis," Economics Bulletin, Economics Bulletin, vol. 15(13), pages 1-10. [Downloadable!]
  3. Alex Coad & Rekha Rao, 2006. "Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach," LEM Papers Series 2006/18, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
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