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Innovation and Productivity in European Industries

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  • Mario Pianta
  • Andrea Vaona

Abstract

The labour productivity impact of innovation is investigated in this paper combining neo-Schumpeterian insights on the variety of innovation, with the importance of industrial structures and firm size; two models are proposed for explaining productivity and export success in European manufacturing industries and firm size classes. The empirical estimates are based on data from the European innovation survey (CIS 2), covering Austria, France, Italy, the Netherlands and the UK, broken down by 22 sectors and for large, medium and small firms. The econometric results, obtained adopting cross-sectional estimation methodologies able to account for unobserved industrial characteristics, show that productivity in Europe relies on product and process innovation, with the support of the efficiency gains provided by a grouped business structures. Conversely, in Italy the introduction of new machinery linked to innovation appears as the key mechanism supporting domestic productivity. When export success is considered, all countries have to rely on an innovation-based model of competitiveness.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1283.

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Length: 37 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:kie:kieliw:1283

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Keywords: Innovation; productivity; export performance; industries;

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References

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  1. Nerlove, Marc, 1971. "A Note on Error Components Models," Econometrica, Econometric Society, vol. 39(2), pages 383-96, March.
  2. Jeroen Hinloopen, 2003. "Innovation performance across Europe," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 12(2), pages 145-161.
  3. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
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  9. Wakelin, Katharine, 2001. "Productivity growth and R&D expenditure in UK manufacturing firms," Research Policy, Elsevier, vol. 30(7), pages 1079-1090, August.
  10. Francesco Bogliacino & Mario Pianta, 2011. "Innovation and demand in industry dynamics," Working Papers 1101, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2011.
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Citations

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Cited by:
  1. Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2008. "Innovation and Productivity in SMEs: Empirical Evidence for Italy," NBER Working Papers 14594, National Bureau of Economic Research, Inc.
  2. Jaan Masso & Priit Vahter, 2008. "Technological innovation and productivity in late-transition Estonia: econometric evidence from innovation surveys," European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 240-261.
  3. Anna Sabadash, 2013. "ICT-induced Technological Progress and Employment: A Literature Review," JRC-IPTS Working Papers on Digital Economy 2013-07, Institute of Prospective Technological Studies, Joint Research Centre.
  4. Castellacci, Fulvio, 2008. "Innovation and the competitiveness of industries: comparing the mainstream and the evolutionary approaches," MPRA Paper 27523, University Library of Munich, Germany.
  5. Matteo Bugamelli & Luigi Cannari & Francesca Lotti & Silvia Magri, 2012. "The innovation gap of Italy’s production system: roots and possible solutions," Questioni di Economia e Finanza (Occasional Papers) 121, Bank of Italy, Economic Research and International Relations Area.
  6. Bruno Chiarini & Paolo Piselli, 2012. "Equilibrium earning premium and pension schemes: The long-run macroeconomic effects of the union," Discussion Papers 2_2012, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.

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