IDEAS home Printed from https://ideas.repec.org/p/trt/disawp/0803.html
   My bibliography  Save this paper

R&D, firm size, and product innovation dynamics

Author

Listed:
  • Marco Corsino
  • Giuseppe Espa
  • Rocco Micciolo

Abstract

This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and firm size on innovation output. It further explores how structural characteristics of the firm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled firms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.

Suggested Citation

  • Marco Corsino & Giuseppe Espa & Rocco Micciolo, 2008. "R&D, firm size, and product innovation dynamics," DISA Working Papers 0803, Department of Computer and Management Sciences, University of Trento, Italy, revised 18 Jun 2008.
    • Handle: RePEc:trt:disawp:0803
    as

    Download full text from publisher

    File URL: http://www.unitn.it/files/download/10533/03.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Santarelli, Enrico & Piergiovanni, Roberta, 1996. "Analyzing literature-based innovation output indicators: the Italian experience," Research Policy, Elsevier, vol. 25(5), pages 689-711, August.
    2. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    3. Hall, Bronwyn H & Griliches, Zvi & Hausman, Jerry A, 1986. "Patents and R and D: Is There a Lag?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(2), pages 265-283, June.
    4. Zoltan J. Acs & David B. Audretsch, 2008. "Innovation in Large and Small Firms: An Empirical Analysis," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 1, pages 3-15, Edward Elgar Publishing.
    5. Fisher, Franklin M & Temin, Peter, 1973. "Returns to Scale in Research and Development: What Does the Schumpeterian Hypothesis Imply ?," Journal of Political Economy, University of Chicago Press, vol. 81(1), pages 56-70, Jan.-Feb..
    6. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107, Elsevier.
    7. Tether, B. S., 1998. "Small and large firms: sources of unequal innovations?," Research Policy, Elsevier, vol. 27(7), pages 725-745, November.
    8. Richard R. Nelson, 1991. "Why do firms differ, and how does it matter?," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 61-74, December.
    9. Kamien, Morton I & Schwartz, Nancy L, 1975. "Market Structure and Innovation: A Survey," Journal of Economic Literature, American Economic Association, vol. 13(1), pages 1-37, March.
    10. Geroski, P. A. & Van Reenen, J. & Walters, C. F., 1997. "How persistently do firms innovate?," Research Policy, Elsevier, vol. 26(1), pages 33-48, March.
    11. Alfred Kleinknecht & Kees Van Montfort & Erik Brouwer, 2002. "The Non-Trivial Choice between Innovation Indicators," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(2), pages 109-121.
    12. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053.
    13. David J. Teece & Richard Rumelt & Giovanni Dosi & Sidney Winter, 2000. "Understanding Corporate Coherence: Theory and Evidence," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 9, pages 264-293, Edward Elgar Publishing.
    14. Hall, Bronwyn H & Ziedonis, Rosemarie Ham, 2001. "The Patent Paradox Revisited: An Empirical Study of Patenting in the U.S. Semiconductor Industry, 1979-1995," RAND Journal of Economics, The RAND Corporation, vol. 32(1), pages 101-128, Spring.
    15. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    16. Rosenberg, Nathan & Steinmueller, W Edward, 1988. "Why Are Americans Such Poor Imitators?," American Economic Review, American Economic Association, vol. 78(2), pages 229-234, May.
    17. Richard R. Nelson, 1959. "The Simple Economics of Basic Scientific Research," Journal of Political Economy, University of Chicago Press, vol. 67(3), pages 297-297.
    18. Kohn, Meir & Scott, John T, 1982. "Scale Economies in Research and Development: The Schumpeterian Hypothesis," Journal of Industrial Economics, Wiley Blackwell, vol. 30(3), pages 239-249, March.
    19. Robertson, Paul L. & Langlois, Richard N., 1995. "Innovation, networks, and vertical integration," Research Policy, Elsevier, vol. 24(4), pages 543-562, July.
    20. Coombs, R. & Narandren, P. & Richards, A., 1996. "A literature-based innovation output indicator," Research Policy, Elsevier, vol. 25(3), pages 403-413, May.
    21. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521645201.
    22. Toby E. Stuart, 2000. "Interorganizational alliances and the performance of firms: a study of growth and innovation rates in a high‐technology industry," Strategic Management Journal, Wiley Blackwell, vol. 21(8), pages 791-811, August.
    23. Norio Tokumaru, 2006. "The organizational evolution of innovative activity in the US semiconductor industry: Technological specialization and diversification," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(6), pages 591-603.
    24. Zoltan Acs & David Audretsch, 1990. "Innovation and Small Firms," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011131, December.
    25. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, December.
    26. Malerba, Franco & Orsenigo, Luigi, 1996. "The Dynamics and Evolution of Industries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(1), pages 51-87.
    27. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Multiproduct Firms, Product Differentiation, and Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
    28. Kim, S Ran, 1998. "The Korean System of Innovation and the Semiconductor Industry: A Governance Perspective," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(2), pages 275-309, June.
    29. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 2, number 2.
    30. Pavitt, Keith & Robson, Michael & Townsend, Joe, 1987. "The Size Distribution of Innovating Firms in the UK: 1945-1983," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 297-316, March.
    31. Giovanni Dosi, 1984. "Technical Change and Industrial Transformation," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-17521-5.
    32. repec:crs:wpaper:9833 is not listed on IDEAS
    33. Flor, M. L. & Oltra, M. J., 2004. "Identification of innovating firms through technological innovation indicators: an application to the Spanish ceramic tile industry," Research Policy, Elsevier, vol. 33(2), pages 323-336, March.
    34. R. Schmalensee & R. Willig (ed.), 1989. "Handbook of Industrial Organization," Handbook of Industrial Organization, Elsevier, edition 1, volume 1, number 1.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alsharkas Zeina, 2014. "Firm Size, Competition, Financing and Innovation," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 44(1), pages 51-73, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    2. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    3. Marco Corsino, 2008. "Product Innovation and Growth: The Case of Integrated Circuits," ROCK Working Papers 047, Department of Computer and Management Sciences, University of Trento, Italy, revised 23 Jun 2008.
    4. Burak Dindaroglu, 2011. "R&D Productivity and Firm Size in Semiconductors and Pharmaceuticals: Evidence from Citation Yields," Working Papers 1101, Izmir University of Economics.
    5. Zoltan J. Acs & David B. Audretsch, 2005. "Entrepreneurship and Innovation," Papers on Entrepreneurship, Growth and Public Policy 2005-21, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    6. Karbowski Adam, 2016. "The Elasticity-Based Approach to Enterprise Innovation," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 49(1), pages 58-78, March.
    7. Mickey Folkeringa & Andre van Stel & Joris Meijaard, 2005. "Innovation, strategic renewal and its effect on small firm performance," Papers on Entrepreneurship, Growth and Public Policy 2005-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
    8. Dziallas, Marisa & Blind, Knut, 2019. "Innovation indicators throughout the innovation process: An extensive literature analysis," Technovation, Elsevier, vol. 80, pages 3-29.
    9. Dario Guarascio & Mario Pianta & Francesco Bogliacino, 2017. "Export, R&D and New Products: A Model and a Test on European Industries," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 393-432, Springer.
    10. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    11. Janger, Jürgen & Schubert, Torben & Andries, Petra & Rammer, Christian & Hoskens, Machteld, 2017. "The EU 2020 innovation indicator: A step forward in measuring innovation outputs and outcomes?," Research Policy, Elsevier, vol. 46(1), pages 30-42.
    12. Hagedoorn, John & Cloodt, Myriam, 2003. "Measuring innovative performance: is there an advantage in using multiple indicators?," Research Policy, Elsevier, vol. 32(8), pages 1365-1379, September.
    13. Uwe Cantner, 2017. "Foundations of Economic Change: An Extended Schumpeterian Approach," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 9-49, Springer.
    14. Burak Dindaroğlu, 2018. "Determinants of patent quality in U.S. manufacturing: technological diversity, appropriability, and firm size," The Journal of Technology Transfer, Springer, vol. 43(4), pages 1083-1106, August.
    15. Cucculelli, Marco & Ermini, Barbara, 2012. "New product introduction and product tenure: What effects on firm growth?," Research Policy, Elsevier, vol. 41(5), pages 808-821.
    16. Tsouchnika, Maria & Smolyak, Alex & Argyrakis, Panos & Havlin, Shlomo, 2022. "Patent collaborations: From segregation to globalization," Journal of Informetrics, Elsevier, vol. 16(1).
    17. Peter G. Klein & Robert Wuebker, 2020. "Corporate diversification and innovation: Managerial myopia or inefficient internal capital markets?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(8), pages 1403-1416, December.
    18. Mohnen, Pierre, 2019. "R&D, innovation and productivity," MERIT Working Papers 2019-016, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    19. Huergo, Elena, 2006. "The role of technological management as a source of innovation: Evidence from Spanish manufacturing firms," Research Policy, Elsevier, vol. 35(9), pages 1377-1388, November.
    20. Michael L. Katz & Howard A. Shelanski, 2005. "Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change?," NBER Chapters, in: Innovation Policy and the Economy, Volume 5, pages 109-165, National Bureau of Economic Research, Inc.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:trt:disawp:0803. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roberto Gabriele (email available below). General contact details of provider: https://edirc.repec.org/data/ditreit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.