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The link between innovation and productivity in Estonia's services sector

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Listed author(s):
  • Jaan Masso
  • Priit Vahter

Abstract

This paper investigates how the innovation--productivity relationship differs across various sub-branches of the services sector. The Crépon, Duguet and Mairesse structural model is used, consisting of equations for innovation expenditures, innovation output, productivity and exports. The data are taken from the Community Innovation Surveys for Estonia. It is shown that innovation is associated with increased productivity. The results indicate, surprisingly, that the association between technological innovation and productivity is stronger in the less knowledge-intensive service (KIS) sectors. Non-technological innovation plays a positive role especially in KISs. An indirect channel of the effects of innovation on productivity appears to function through increased exports.

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File URL: http://hdl.handle.net/10.1080/02642069.2011.600444
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Article provided by Taylor & Francis Journals in its journal The Service Industries Journal.

Volume (Year): 32 (2012)
Issue (Month): 16 (December)
Pages: 2527-2541

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Handle: RePEc:taf:servic:v:32:y:2012:i:16:p:2527-2541
DOI: 10.1080/02642069.2011.600444
Contact details of provider: Web page: http://www.tandfonline.com/FSIJ20

Order Information: Web: http://www.tandfonline.com/pricing/journal/FSIJ20

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Find related papers by JEL classification:
  • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
  • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
  • L80 - Industrial Organization - - Industry Studies: Services - - - General

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  1. 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.
  2. Antonio Musolesi & Jean-Pierre Huiban, 2010. "Innovation and productivity in knowledge intensive business services," Journal of Productivity Analysis, Springer, vol. 34(1), pages 63-81, August.
  3. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
  4. Bart van Ark & Mary O'Mahoney & Marcel P. Timmer, 2008. "The Productivity Gap between Europe and the United States: Trends and Causes," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 25-44, Winter.
  5. Lööf, Hans & Heshmati, Almas & Asplund, Rita & Nåås, Svein-Olav, 2001. "Innovation and Performance in Manufacturing Industries: A Comparison of the Nordic Countries," SSE/EFI Working Paper Series in Economics and Finance 0457, Stockholm School of Economics.
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Cited by:

  1. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2014. "Innovation and Productivity in Services: Evidence from Germany, Ireland and the United Kingdom," JRC Working Papers on Corporate R&D and Innovation 2014-04, Joint Research Centre (Seville site).
  2. Acosta, Manuel & Coronado, Daniel & Romero, Carlos, 2015. "Linking public support, R&D, innovation and productivity: New evidence from the Spanish food industry," Food Policy, Elsevier, vol. 57(C), pages 50-61.
  3. Berulava, George & Gogokhia, Teimuraz, 2016. "Studying Complementarities between Modes of Innovation Strategies in Transition Economies," MPRA Paper 71277, University Library of Munich, Germany.
  4. Rehman, Naqeeb Ur, 2016. "Self-Selection and Learning-by-Exporting Hypotheses: Micro Level Evidence," MPRA Paper 71480, University Library of Munich, Germany.
  5. Roberto Álvarez & Claudio Bravo-Ortega & Andrés Zahler, 2015. "Innovation and Productivity in Services: Evidence from Chile," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(3), pages 593-611, May.
  6. Rehman, Naqeeb Ur, 2016. "Does Internal and External Research and Development Affect Innovation of Small and Medium-Sized Enterprises? Evidence from India and Pakistan," ADBI Working Papers 577, Asian Development Bank Institute.

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