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A matter of life and death: innovation and firm survival

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  • Elena Cefis
  • Orietta Marsili

Abstract

This article examines the effects of innovation on survival using data on all manufacturing firms active in the Netherlands and the Community Innovation Survey. By estimating a parametric duration model, we show that firms benefit from an innovation premium that extends their life expectancy, independent of firm-specific traits such as age and size. Process innovation in particular seems to have a distinctive effect on survival. Furthermore, survival chances increase with the age and growth rate of a firm, the latter being more crucial than initial size. Finally, high intensity technology sectors are the most favorable to firm's survival. Copyright 2005, Oxford University Press.

Suggested Citation

  • Elena Cefis & Orietta Marsili, 2005. "A matter of life and death: innovation and firm survival," Industrial and Corporate Change, Oxford University Press, vol. 14(6), pages 1167-1192, December.
  • Handle: RePEc:oup:indcch:v:14:y:2005:i:6:p:1167-1192
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    More about this item

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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