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Innovation and Productivity in European Industries

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Author Info
Mario Pianta
Andrea Vaona

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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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File URL: http://www.ifw-kiel.de/pub/kap?selectedYear=2006
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Publisher 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
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Handle: RePEc:kie:kieliw:1283

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Keywords: Innovation productivity export performance industries

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Find related papers by JEL classification:
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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References listed on IDEAS
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. Den Hertog, R.G.J. & Thurik, A.R., 1992. "Determinants of Large-and Small-Firm Innovation: Some New Evidence," Papers 9238-a, Erasmus University of Rotterdam - Econometric Institute.
  2. Brouwer, Maria, 1998. " Firm Size and Efficiency in Innovation: Comment," Small Business Economics, Springer, vol. 11(4), pages 391-93, December. [Downloadable!] (restricted)
  3. Van Dijk, Bob, et al, 1997. " Some New Evidence on the Determinants of Large- and Small-Firm Innovation," Small Business Economics, Springer, vol. 9(4), pages 335-43, August. [Downloadable!] (restricted)
  4. Mario Pianta & Andrea Vaona, 2006. "Firm size and Innovation in European Manufacturing," Kiel Working Papers 1284, Kiel Institute for the World Economy. [Downloadable!]
    Other versions:
  5. Robert J. Gordon, 1998. "Foundations of the Goldilocks Economy: Supply Shocks and the Time-Varying NAIRU," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1998-2), pages 297-346. [Downloadable!]
    Other versions:
  6. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Economics Department. [Downloadable!]
    Other versions:
  7. Jeroen Hinloopen, 2003. "Innovation Performance Across Europe," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 12(2), pages 145-161, January. [Downloadable!] (restricted)
  8. Wakelin, Katharine, 2001. "Productivity growth and R&D expenditure in UK manufacturing firms," Research Policy, Elsevier, vol. 30(7), pages 1079-1090, August. [Downloadable!] (restricted)
  9. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papers 98.15, Paris I - Economie Mathematique et Applications.
  10. Nerlove, Marc, 1971. "A Note on Error Components Models," Econometrica, Econometric Society, vol. 39(2), pages 383-96, March. [Downloadable!] (restricted)
  11. George van Leeuwen, 2002. "Linking Innovation to Productivity Growth Using Two Waves of the Community Innovation Survey," OECD Science, Technology and Industry Working Papers 2002/8, OECD Directorate for Science, Technology and Industry. [Downloadable!]
  12. Davis, Peter, 2002. "Estimating multi-way error components models with unbalanced data structures," Journal of Econometrics, Elsevier, vol. 106(1), pages 67-95, January. [Downloadable!] (restricted)
  13. 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. [Downloadable!] (restricted)
  14. Baltagi, Badi H., 1985. "Pooling cross-sections with unequal time-series lengths," Economics Letters, Elsevier, vol. 18(2-3), pages 133-136. [Downloadable!] (restricted)
  15. Moulton, Brent R & Randolph, William C, 1989. "Alternative Tests of the Error Components Model," Econometrica, Econometric Society, vol. 57(3), pages 685-93, May. [Downloadable!] (restricted)
  16. Nerlove, Marc, 1971. "Further Evidence on the Estimation of Dynamic Economic Relations from a Time Series of Cross Sections," Econometrica, Econometric Society, vol. 39(2), pages 359-82, March.
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  17. Kenneth Carlaw & Stephen Kosempel, 2004. "The sources of total factor productivity growth: Evidence from Canadian data," Economics of Innovation and New Technology, Taylor and Francis Journals, vol. 13(4), pages 299-309, June. [Downloadable!] (restricted)
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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. Jaan Masso & Priit Vahter, 2008. "Technological Innovation And Productivity In Late-Transition Estonia: Econometric Evidence From Innovation Surveys," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 61, Faculty of Economics and Business Administration, University of Tartu (Estonia). [Downloadable!]
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