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Learning-by-failing. An empirical exercise on CIS data

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  • Leoncini, Riccardo

Abstract

Failure to innovate has been only recently recognized as one of the key elements in determining successful firms’ innovative performance. However, as this literature focuses only on the determinants of firms’ failure, it neglects the role of failure in spurring innovative activity. In this paper, the relationship between innovative performance and failure to innovate is empirically tested, through a two step econometric model, on the 2008 CIS Innovation survey dataset. The main results of the paper are, first, that failure is negatively correlated to the firms’ experience (proxies by R&D), and to the acquisition of direct external knowledge (through productive links in product and process innovation). Indirect learning from the failures of similar firms is moderated by firms engagement in R&D and in searching for external knowledge. The second step reveals that failure in turn has a positive impact on performance in term of percentage of turnover from new to the market innovative products. Finally, an additional test is performed on still ongoing innovation (rather than abandoned), and the results show a minor impact on innovation activity.

Suggested Citation

  • Leoncini, Riccardo, 2016. "Learning-by-failing. An empirical exercise on CIS data," Research Policy, Elsevier, vol. 45(2), pages 376-386.
  • Handle: RePEc:eee:respol:v:45:y:2016:i:2:p:376-386
    DOI: 10.1016/j.respol.2015.10.006
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    3. Turner, James A. & Klerkx, Laurens & White, Toni & Nelson, Tracy & Everett-Hincks, Julie & Mackay, Alec & Botha, Neels, 2017. "Unpacking systemic innovation capacity as strategic ambidexterity: How projects dynamically configure capabilities for agricultural innovation," Land Use Policy, Elsevier, vol. 68(C), pages 503-523.
    4. Nemet, Gregory F. & Zipperer, Vera & Kraus, Martina, 2018. "The valley of death, the technology pork barrel, and public support for large demonstration projects," Energy Policy, Elsevier, vol. 119(C), pages 154-167.
    5. Tsinopoulos, Christos & Yan, Ji & Sousa, Carlos M.P., 2019. "Abandoning innovation activities and performance: The moderating role of openness," Research Policy, Elsevier, vol. 48(6), pages 1399-1411.
    6. Santamaría, Luis & Nieto, María Jesús & Rodríguez, Alicia, 2021. "Failed and successful innovations: The role of geographic proximity and international diversity of partners in technological collaboration," Technological Forecasting and Social Change, Elsevier, vol. 166(C).
    7. Khalil Rhaiem & Nabil Amara, 2021. "Learning from innovation failures: a systematic review of the literature and research agenda," Review of Managerial Science, Springer, vol. 15(2), pages 189-234, February.
    8. Eum, Wonsub & Lee, Jeong-Dong, 2019. "Role of production in fostering innovation," Technovation, Elsevier, vol. 84, pages 1-10.
    9. de-Oliveira, Fernando & Rodil-Marzábal, Óscar, 2019. "Structural characteristics and organizational determinants as obstacles to innovation in small developing countries," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 306-314.
    10. Revilla, Elena & Rodríguez-Prado, Beatriz, 2018. "Bulding ambidexterity through creativity mechanisms: Contextual drivers of innovation success," Research Policy, Elsevier, vol. 47(9), pages 1611-1625.
    11. James H. Love & Stephen Roper & Priit Vahter, 2020. "Do Firms Really Learn From Failure? The Dynamics Of Abandoned Innovation," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 124, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    12. Ferreira, João J.M. & Fernandes, Cristina I. & Ferreira, Fernando A.F., 2020. "Wearing failure as a path to innovation," Journal of Business Research, Elsevier, vol. 120(C), pages 195-202.

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