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The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms

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  • Criscuolo, Paola
  • Nicolaou, Nicos
  • Salter, Ammon

Abstract

Despite the widely acknowledged role of start-ups in economic development, little is known about their innovative activities compared with those of established firms. Drawing on a sample of 12,209 UK firms, we differentiate between services and manufacturing firms and, using a matching estimator approach, demonstrate that start-ups differ significantly from established firms in their innovation activities. We find that in services, being a start-up increases the likelihood of product innovations. However, in manufacturing, we find no significant differences in the likelihood of product innovation between start-ups and established firms. When examining the returns to innovation, we find that start-ups have a significant advantage both in services and in manufacturing. We explore the implications of these results for theory and policy.

Suggested Citation

  • Criscuolo, Paola & Nicolaou, Nicos & Salter, Ammon, 2012. "The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms," Research Policy, Elsevier, vol. 41(2), pages 319-333.
  • Handle: RePEc:eee:respol:v:41:y:2012:i:2:p:319-333
    DOI: 10.1016/j.respol.2011.12.001
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Henry Sauermann, 2017. "Fire in the Belly? Employee Motives and Innovative Performance in Startups versus Established Firms," NBER Working Papers 23099, National Bureau of Economic Research, Inc.
    2. Machado Léo, Ricardo & Tello‐Gamarra, Jorge, 2016. "Inovac¸ão em servic¸os: estado da arte e perspectivas futuras
      [Innovation in services: state of the art and future perspectives]
      ," MPRA Paper 82195, University Library of Munich, Germany, revised 29 Mar 2017.
    3. D'Este,Pablo & Rentocchini,Francesco & Vega Jurado,Jaider M., 2012. "The role of human capital in lowering barriers to engage in innovation: evidence from the Spanish innovation survey," INGENIO (CSIC-UPV) Working Paper Series 201206, INGENIO (CSIC-UPV), revised 03 Aug 2012.
    4. Gabriele Pellegrino & Mariacristina Piva, 2014. "Do innovative inputs lead to different innovative outputs in mature and young firms?," DISCE - Quaderni del Dipartimento di Scienze Economiche e Sociali dises1497, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    5. Nicolau, Juan Luis & Santa-María, María Jesús, 2013. "Communicating excellence in innovation," Economics Letters, Elsevier, vol. 118(1), pages 87-90.
    6. Fernandes, Cristina & Ferreira, João & Raposo, Mario, 2013. "Drivers to firm innovation and their effects on performance: An international comparison," MPRA Paper 46776, University Library of Munich, Germany.
    7. H. T. Tran & E. Santarelli, 2013. "Revisiting Italian Emigration Before the Great War: A Test of the Standard Economic Model," Working Papers wp909, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Neil Lee, 2013. "Cultural Diversity, Cities and Innovation: firm Effects or City Effects?," SERC Discussion Papers 0144, Spatial Economics Research Centre, LSE.
    9. Coad, Alex & Segarra, Agustí & Teruel, Mercedes, 2016. "Innovation and firm growth: Does firm age play a role?," Research Policy, Elsevier, vol. 45(2), pages 387-400.
    10. Caterina Santi & Pietro Santoleri, 2017. "Exploring the link between innovation and growth in Chilean firms," Small Business Economics, Springer, vol. 49(2), pages 445-467, August.
    11. repec:eee:respol:v:46:y:2017:i:7:p:1312-1326 is not listed on IDEAS

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