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On the relationship between innovation and performance: A sensitivity analysis

  • Hans Loof
  • Almas Heshmati

We examine sensitivity of the estimated relationship between innovation and firm performance. In doing so, we rely on a knowledge production function approach and carry out comparisons in a number of ways. The sensitivity analysis is based on the comparison of a basic econometric model estimated assuming different error structure and using the same data source, an identical model but different data sources, different classifications of firms performance, different classifications of innovation and the two main different subpopulations of the business sector. The analyses are performed in both level and growth-rate dimensions. New findings are reported and previous results are confirmed as well. The study gives indications of what factors cause variations in the estimated effects of interest and the direction of changes.

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Article provided by Taylor & Francis Journals in its journal Economics of Innovation and New Technology.

Volume (Year): 15 (2006)
Issue (Month): 4-5 ()
Pages: 317-344

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Handle: RePEc:taf:ecinnt:v:15:y:2006:i:4-5:p:317-344
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  6. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
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  19. Loof, Hans & Heshmati, Almas, 2002. "Knowledge capital and performance heterogeneity: : A firm-level innovation study," International Journal of Production Economics, Elsevier, vol. 76(1), pages 61-85, March.
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