The Link Between Innovation And Productivity In Estonian Service Sector
AbstractThe emerging literature on the characteristics of innovation processes in the service sector has paid relatively little attention to the links between innovation and productivity. In this paper we investigate how the innovation-productivity relationship differs across various sub-branches of the service sector. For the analysis we use the CDM structural model consisting of equations for innovation expenditures, innovation output, productivity and exports. We use data from the community innovation surveys for Estonia. We show that innovation is associated with increased productivity in the service sector. The results indicate surprisingly that the effect of innovation on productivity is stronger in the less knowledge-intensive service sectors, despite the lower frequency of innovative activities and the results of earlier literature. Non-technological innovation only plays a positive role in some specifications, despite its expected importance especially among the service firms. An additional positive channel of the effects of innovation on productivity may function through increased exports.
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Bibliographic InfoPaper provided by Faculty of Economics and Business Administration, University of Tartu (Estonia) in its series University of Tartu - Faculty of Economics and Business Administration Working Paper Series with number 80.
Length: 34 pages
Date of creation: 2011
Date of revision:
innovation; services; productivity;
Other versions of this item:
- Jaan Masso & Priit Vahter, 2012. "The link between innovation and productivity in Estonia's services sector," The Service Industries Journal, Taylor & Francis Journals, vol. 32(16), pages 2527-2541, December.
- Priit Vahter & Jaan Masso, 2011. "The Link between Innovation and Productivity in Estonia’s Service Sectors," William Davidson Institute Working Papers Series wp1012, William Davidson Institute at the University of Michigan.
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- L80 - Industrial Organization - - Industry Studies: Services - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-CSE-2011-02-26 (Economics of Strategic Management)
- NEP-EFF-2011-02-26 (Efficiency & Productivity)
- NEP-KNM-2011-02-26 (Knowledge Management & Knowledge Economy)
- NEP-SBM-2011-02-26 (Small Business Management)
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