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

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Author Info
Alex Coad () (Centre d'Economie de la Sorbonne)
Rekha Rao (S. Anna School of Advanced Studies, Pisa, Italy)

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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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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
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Handle: RePEc:mse:wpsorb:r06050

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Related research
Keywords: Innovation; firm growth; quantile regression.;

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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
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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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. 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. [Downloadable!] (restricted)
    Other versions:
  2. A. Coad & R. 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. [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!]
    Other versions:
  4. Alex Coad & Rekha Rao, 2006. "Innovation and market value: a quantile regression analysis," Economics Bulletin, Economics Bulletin, vol. 15(13), pages 1-10. [Downloadable!]
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