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Productivity and innovation: an overview of the issues

Author

Listed:
  • Petr Hanel

    (CIRST, GREDI, Faculte d'administration, Université de Sherbrooke)

Abstract

To introduce the subject, the paper compares the Canadian performance on principal indicators of productivity and innovation with the U.S. and other countries. Follows an overview of principal sources of economic welfare, economic growth and increasing productivity with a special attention given to the relationship between productivity growth and innovation. Before addressing the relationship between innovation and productivity, the paper introduces the concepts and their operational measures or indicators, the sources of innovation and their effects as well as financing and public policies in support of innovation. In the section on the link between innovation and productivity the paper surveys the representative empirical studies of this relationship on industry and enterprise level, including the evidence on private and social returns on investment in R&D and innovation in Canada and abroad. Follows a description of the current econometric modelling of micro-data on innovation and its effect on firm performance. These innovation surveys-based micro econometric studies are inspired by the four-stage CDM model that predicts (1) the probability that a firm innovates, (2) the resources it invests in the activity, (3) the commercial results of innovation and (4) the effect of innovation on firms’ performance indicators such as sales per employee, labour productivity and its growth etc. This model provides the standardized methodology for an ongoing international research project analyzing the data from innovation surveys of majority of OECD countries.

Suggested Citation

  • Petr Hanel, 2007. "Productivity and innovation: an overview of the issues," Cahiers de recherche 07-22, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    • Handle: RePEc:shr:wpaper:07-22
    as

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    File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0722.pdf
    File Function: First version, 2007
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    References listed on IDEAS

    as
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    2. Zvi Griliches, 1998. "Productivity, R&D, and the Data Constraint," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 347-374, National Bureau of Economic Research, Inc.
    3. Baldwin, John R. & Hanel, Peter, 2000. "Multinationals and the Canadian Innovation Process," Analytical Studies Branch Research Paper Series 2000151e, Statistics Canada, Analytical Studies Branch.
    4. Andrew Sharpe, 2002. "Raising Canadian Living Standards: A Framework for Analysis," International Productivity Monitor, Centre for the Study of Living Standards, vol. 5, pages 23-40, Fall.
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    7. Gu, Wulong Gera, Surendra, 2004. "The Effect of Organizational Innovation and Information Technology on Firm Performance," The Canadian Economy in Transition 2004007e, Statistics Canada, Economic Analysis Division.
    8. Stiroh, K.J., 2000. "Investment and Productivity Growth - A Survey from the Neoclassical and New Growth Perspectives," Papers 24, Gouvernement du Canada - Industry Canada;Gouvernement du Canada - Industry Canada.
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    11. Ken Mayhew & Andy Neely, 2006. "Improving Productivity--Opening the Black Box," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 445-456, Winter.
    12. Jacques Mairesse & Pierre Mohnen, 1990. "Recherche-Développement et productivité : un survol de la littérature économétrique," Économie et Statistique, Programme National Persée, vol. 237(1), pages 99-108.
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    Cited by:

    1. Pierre Therrien & Petr Hanel, 2011. "Innovation and Productivity: Summary Results for Canadian Manufacturing Establishments," International Productivity Monitor, Centre for the Study of Living Standards, vol. 22, pages 11-28, Fall.

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    More about this item

    Keywords

    Innovation; R&D; productivity; econometric modelling; Canada;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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    1. Socio-Economics of Innovation

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