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Innovation, ownership and profitability

  • Love, James H.
  • Roper, Stephen
  • Du, Jun

This paper considers the relationship between innovation, ownership and profitability for a panel of manufacturing plants in Ireland and Northern Ireland. Previous literature suggests that innovators are persistently more profitable than non-innovators, but little is known about how this link is moderated by external versus domestic ownership. We consider the link between innovation and profits separately for indigenous innovators and non-innovators and externally-owned plants. We also consider the determinants of innovation over the distribution of plant-level profitability, and find that the determinants of profitability - including innovation and external ownership - vary over the distribution from low to high profitability plants. We find support for the view that innovators and non-innovators have different profitability determinants, and that the profitability of externally-owned plants depends on very different factors to those of indigenously-owned enterprises.

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File URL: http://www.sciencedirect.com/science/article/B6V8P-4V1660X-1/2/f54e36b1bcc99333ee4bfcdf686e4f7a
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Article provided by Elsevier in its journal International Journal of Industrial Organization.

Volume (Year): 27 (2009)
Issue (Month): 3 (May)
Pages: 424-434

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Handle: RePEc:eee:indorg:v:27:y:2009:i:3:p:424-434
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505551

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