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Path and past dependence of firm innovation

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  • Achim Hecker
  • Alois Ganter

Abstract

This study examines persistence of product, process, and organizational innovations for a large sample of German firms over the time span from 2002 to 2008. Descriptive analyses using transition probability matrices show pronounced patterns of persistence for all three types of innovation. State dependence effects vanish for process and organizational innovations once we control for unobserved heterogeneity and endogenize initial conditions (Wooldridge approach). We conclude that product innovation processes exhibit significant path dependence; process and organizational innovations, in contrast, are primarily shaped by time-invariant and unobserved firm characteristics. In addition, we find evidence of intertemporal complementarities among the various innovation types.

Suggested Citation

  • Achim Hecker & Alois Ganter, 2014. "Path and past dependence of firm innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(5-6), pages 563-583, September.
    • Handle: RePEc:taf:ecinnt:v:23:y:2014:i:5-6:p:563-583
    DOI: 10.1080/10438599.2014.895510
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    References listed on IDEAS

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    1. Cristiano Antonelli & Dominique Foray & Bronwyn H. Hall & W. Edward Steinmueller (ed.), 2006. "New Frontiers in the Economics of Innovation and New Technology," Books, Edward Elgar Publishing, number 3286.
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    Cited by:

    1. Chuks Otioma, 2023. "IT Capability, Organisational Learning and Innovation Performance of Firms in Kenya," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(3), pages 3489-3517, September.
    2. Brink, Siegrun & Schröder, Christian & Nielen, Sebastian & Günther, Christina, 2026. "Innovation in times of crisis: Does pre-existing innovation experience matter?," Working Papers 01/26, Institut für Mittelstandsforschung (IfM) Bonn.
    3. Santiago José Gahn, 2025. "Path dependence in the digital adoption process: a cross-section analysis of Italian firms with a special focus on the Apulia region," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(4), pages 967-987, December.
    4. Mañez, J.A. & Love, J.H., 2020. "Quantifying sunk costs and learning effects in R&D persistence," Research Policy, Elsevier, vol. 49(7).
    5. Rammer, Christian & Schubert, Torben, 2016. "Concentration on the few? R&D and innovation in German firms 2001 to 2013," ZEW Discussion Papers 16-005, ZEW - Leibniz Centre for European Economic Research.
    6. Maria Elena Bontempi & Luca Lambertini & Giuseppe Parigi, 2024. "Exploring the innovative effort: duration models and heterogeneity," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 587-656, September.
    7. Alejandro Bello-Pintado & Felipe Berrutti & Carlos Bianchi & Pablo Blanchard, 2019. "Knowledge searching strategies, testing for complementarities on the innovation behavior of the firm," Documentos de Trabajo (working papers) 19-18, Instituto de Economía - IECON.
    8. Marta F. Arroyabe & Martin Schumann, 2022. "On the Estimation of True State Dependence in the Persistence of Innovation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(4), pages 850-893, August.
    9. Achim Hecker & Alois Ganter, 2016. "Organisational And Technological Innovation And The Moderating Effect Of Open Innovation Strategies," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-31, February.

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