Persistence of Innovation: Stylised Facts and Panel Data Evidence
Abstract
This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994?2002. We find that innovation behaviour is permanent at the firm?level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), we further shed some light on the driving forces for this phenomenon. The econometric results confirm the hypothesis of true state dependence for manufacturing as well as for service sector firms. In addition to past innovation experience, the results further highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation. --Download Info
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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-81.Length:
Date of creation: 2005
Date of revision:
Handle: RePEc:zbw:zewdip:4564
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Related research
Keywords: innovation; persistence; state dependence; unobserved heterogeneity; dynamic random effects panel probit model;Other versions of this item:
- Bettina Peters, 2009. "Persistence of innovation: stylised facts and panel data evidence," The Journal of Technology Transfer, Springer, vol. 34(2), pages 226-243, April.
- Bettina Peters, 2005. "Persistence of Innovation: Stylised Facts and Panel Data Evidence," Development and Comp Systems 0511021, EconWPA.
- Bettina Peters, 2006. "Persistence of Innovation Stylised Facts and Panel Data Evidence," DRUID Working Papers 06-30, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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