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

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Abstract

Innovation is commonly seeb 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 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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Bibliographic Info

Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number r06050.

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Length: 22 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:mse:wpsorb:r06050

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Keywords: Innovation; firm growth; quantile regression.;

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Cited by:
  1. repec:ebl:ecbull:v:15:y:2006:i:13:p:1-10 is not listed on IDEAS
  2. Alexander Coad & Rekha Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Economics and Evolution 2007-05, Max Planck Institute of Economics, Evolutionary Economics Group.
  3. Erik Stam & Karl Wennberg, 2009. "The roles of R&D in new firm growth," Small Business Economics, Springer, vol. 33(1), pages 77-89, June.
  4. Alex Coad & Rekha Rao, 2007. "Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach," Open Discussion Papers in Economics 57, The Open University, Faculty of Social Sciences, Department of Economics.

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