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Innovation and firm growth in high-tech sectors: A quantile regression approach

  • Coad, Alex
  • Rao, Rekha

We relate innovation to sales growth for incumbent firms in high-tech sectors. A firm, on average, experiences only modest growth and may grow for a number of reasons that may or may not be related to innovative activity. However, given that the returns to innovation are highly skewed and that growth rates distributions are heavy-tailed, it may be misleading to use regression techniques that focus on the 'average effect for the average firm'. Using a quantile regression approach, we observe that innovation is of crucial importance for a handful of 'superstar' fast-growth firms.

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Article provided by Elsevier in its journal Research Policy.

Volume (Year): 37 (2008)
Issue (Month): 4 (May)
Pages: 633-648

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Handle: RePEc:eee:respol:v:37:y:2008:i:4:p:633-648
Contact details of provider: Web page: http://www.elsevier.com/locate/respol

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