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'Inequality' of innovation: skewed distributions and the returns to innovation in Dutch manufacturing

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  • Orietta Marsili
  • Ammon Salter

Abstract

It is a commonly held view that returns to innovation are highly skewed, that is, not all firms innovate, and the returns received from innovation for the firms that are successful innovators are highly concentrated in the hands of the few. Using data from two community innovation surveys for the Netherlands, this article investigates the properties of the distribution of the returns to innovation for different types of innovation. It finds that the returns to innovation are indeed highly skewed, but the distribution of the returns is shaped by the degree of novelty of the innovation - the more novel the innovation, the greater the concentration of the returns. The article also explores the distribution of the returns across different sectoral contexts, finding that low-technology sectors are characterised by higher performance diversity among innovators than high-technology sectors.

Suggested Citation

  • Orietta Marsili & Ammon Salter, 2005. "'Inequality' of innovation: skewed distributions and the returns to innovation in Dutch manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(1-2), pages 83-102.
  • Handle: RePEc:taf:ecinnt:v:14:y:2005:i:1-2:p:83-102
    DOI: 10.1080/1043859042000228642
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    References listed on IDEAS

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    1. F. M. Scherer & Dietmar Harhoff & J, rg Kukies, 2000. "Uncertainty and the size distribution of rewards from innovation," Journal of Evolutionary Economics, Springer, vol. 10(1), pages 175-200.
    2. Luís M B Cabral & José Mata, 2003. "On the Evolution of the Firm Size Distribution: Facts and Theory," American Economic Review, American Economic Association, vol. 93(4), pages 1075-1090, September.
    3. Patel, Pari & Pavitt, Keith, 1997. "The technological competencies of the world's largest firms: Complex and path-dependent, but not much variety," Research Policy, Elsevier, vol. 26(2), pages 141-156, May.
    4. Stanley, Michael H. R. & Buldyrev, Sergey V. & Havlin, Shlomo & Mantegna, Rosario N. & Salinger, Michael A. & Eugene Stanley, H., 1995. "Zipf plots and the size distribution of firms," Economics Letters, Elsevier, vol. 49(4), pages 453-457, October.
    5. Henrekson, Magnus & Johansson, Dan, 1999. "Institutional Effects on the Evolution of the Size Distribution of Firms," Small Business Economics, Springer, vol. 12(1), pages 11-23, February.
    6. Ijiri, Yuji & Simon, Herbert A, 1974. "Interpretations of Departures from the Pareto Curve Firm-Size Distributions," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 315-331, Part I, M.
    7. Malerba, Franco & Orsenigo, Luigi, 1996. "Schumpeterian patterns of innovation are technology-specific," Research Policy, Elsevier, vol. 25(3), pages 451-478, May.
    8. Scherer, F. M. & Harhoff, Dietmar, 2000. "Technology policy for a world of skew-distributed outcomes," Research Policy, Elsevier, vol. 29(4-5), pages 559-566, April.
    9. Chris Freeman & Luc Soete, 1997. "The Economics of Industrial Innovation, 3rd Edition," MIT Press Books, The MIT Press, edition 3, volume 1, number 0262061953, January.
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    Citations

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    Cited by:

    1. Segarra Blasco, Agustí & Teruel Carrizosa, Mercedes, 2008. "Innovation sources and productivity in Catalonian firms: a quantile regression analysis," Working Papers 2072/9259, Universitat Rovira i Virgili, Department of Economics.
    2. Bernhard Dachs & Bernd Ebersberger & Hans Lööf, 2008. "The innovative performance of foreign-owned enterprises in small open economies," The Journal of Technology Transfer, Springer, vol. 33(4), pages 393-406, August.
    3. Ebersberger, Bernd & Marsili, Orietta & Reichstein, Toke & Salter, Ammon, 2008. "Fortune favours the brave: The distribution of innovative returns in Finland, the Netherlands and the UK," Structural Change and Economic Dynamics, Elsevier, vol. 19(4), pages 357-362, December.
    4. Bianca Potì & Giovanni Cerulli, 2007. "Heterogeneity of innovation strategies and firms’ performance," CERIS Working Paper 200706, Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY -NOW- Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY.
    5. Rutzer, Christian, 2014. "A Theory of Trade Liberalization and Innovations with Heterogeneous Firms," Working papers 2014/02, Faculty of Business and Economics - University of Basel.
    6. Mata, José & Woerter, Martin, 2013. "Risky innovation: The impact of internal and external R&D strategies upon the distribution of returns," Research Policy, Elsevier, vol. 42(2), pages 495-501.
    7. repec:taf:oabmxx:v:2:y:2015:i:1:p:1120421 is not listed on IDEAS

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