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The Virtuous Circle of Innovation in Italian Firms

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  • Francesco Bogliacino
  • Matteo Lucchesex
  • Leopoldo Nascia
  • Mario Pianta

Abstract

The “virtuous circle” between innovative inputs, outputs and economic performance is investigated in this article with a three equation model highlighting feedback loops and simultaneous relations. An empirical test is carried out considering innovative expenditure, innovative turnover and economic results in a sample of Italian manufacturing firms which are ‘serial innovators’. We use data for the period 2000-2008 from a rich panel of Italian firms over 50 employees drawn from ISTAT, the National Institute of Statistics, including data from three waves of Community Innovation Surveys. The model we use extends the one developed at the industry level by Bogliacino and Pianta (2013a, 2013b), confirming previous findings. For the – rather limited – core of Italian persistent innovators, results show the complex links at play, the lags in the effects of innovative efforts, and the feedbacks between economic success and the ability to sustain innovation expenditure.

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  • Francesco Bogliacino & Matteo Lucchesex & Leopoldo Nascia & Mario Pianta, 2015. "The Virtuous Circle of Innovation in Italian Firms," Documentos de Trabajo, Escuela de Economía 12630, Universidad Nacional de Colombia, FCE, CID.
    • Handle: RePEc:col:000178:012630
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    2. de-Oliveira, Fernando & Rodil-Marzábal, Óscar, 2019. "Structural characteristics and organizational determinants as obstacles to innovation in small developing countries," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 306-314.

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    More about this item

    Keywords

    Innovation; economic performance; three equation model; Italian firms;
    All these keywords.

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L8 - Industrial Organization - - Industry Studies: Services
    • 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
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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