The relevance of marketing in the success of innovations
AbstractThis paper focuses on marketing expenditures and their relation with R&D investments and innovative sales. A higher investment in R&D is associated with the production of a higher quality or faster innovation, with a positive impact on sales and in a macro sense, an increase of GDP. This paper raises the issue that good innovation need a strong marketing effort in order for this innovation to have an impact on sales, it needs to be desired by consumers. This paper finds empirical evidence that marketing expenditures explain a lot of the success of the innovation 0.5 to 0.7% (measured in terms of the elasticity of this effort to innovative sales), even more than the flow of investment in R&D(which counts for 0.3 %). In fact, the size of the coefficient for marketing doubles those found for R&D, a quite surprising result taking into consideration the little importance that marketing has in innovation studies. The paper uses Community Innovation Survey data, the third wave (CIS 3) and set up a system of simultaneous equations like in Crepon et al. (1998).
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Bibliographic InfoPaper provided by Institute of Prospective Technological Studies, Joint Research Centre in its series JRC-IPTS Working Papers on Corporate R&D and Innovation with number 2011-09.
Length: 26 pages
Date of creation: Dec 2011
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-29 (All new papers)
- NEP-INO-2012-05-29 (Innovation)
- NEP-KNM-2012-05-29 (Knowledge Management & Knowledge Economy)
- NEP-MKT-2012-05-29 (Marketing)
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