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Innovation, profitability and growth in medium and high-tech manufacturing industries: Evidence from Italy

  • Claudio Cozza

    ()

    (European Commission, Joint Research Centre (JRC), Institute for Prospective Technological Studies (IPTS))

  • Franco Malerba

    ()

    (Department of Economics, Bocconi University, Milan, Italy and KiTES Bocconi University, Milan, Italy)

  • Maria Luisa Mancusi

    ()

    (Department of Economics, Bocconi University, Milan, Italy and KiTES Bocconi University, Milan, Italy)

  • Giulio Perani

    (ISTAT - SSI/D (Italian National Institute of Statistics), Rome, Italy)

  • Andrea Vezzulli

    ()

    (Department of Management, University of Bologna, Bologna, Italy and KiTES Bocconi University, Milan, Italy)

The main goal of this paper is to assess the impact of product innovation on the economic performance of firms operating in medium and high-tech industries in general and of SMEs in particular. Using information from a large and unique dataset on Italian firms we estimate, by means of propensity scores matching methods, a positive and significant “innovation premium” both in terms of profitability and growth (in the short run) for those firms who introduced new innovative products. We also find that this innovation premium is particularly large for small firms and even more so when considering new established firms.

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File URL: ftp://ftp.unibocconi.it/pub/RePEc/cri/papers/KitesWP28.pdf
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Paper provided by KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy in its series KITeS Working Papers with number 028.

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Length: 27 pages
Date of creation: 2009
Date of revision: 2009
Handle: RePEc:cri:cespri:kites28_wp
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  1. Bruno Cassiman & Reinhilde Veugelers, 2002. "R&D Cooperation and Spillovers: Some Empirical Evidence from Belgium," American Economic Review, American Economic Association, vol. 92(4), pages 1169-1184, September.
  2. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
  3. Cefis, Elena & Marsili, Orietta, 2006. "Survivor: The role of innovation in firms' survival," Research Policy, Elsevier, vol. 35(5), pages 626-641, June.
  4. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity Score-Matching Methods For Nonexperimental Causal Studies," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 151-161, February.
  5. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level," NBER Working Papers 6696, National Bureau of Economic Research, Inc.
  6. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
  7. Elena Cefis & Matteo Ciccarelli, 2005. "Profit differentials and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(1-2), pages 43-61.
  8. Stefano Iacus & Giuseppe Porro, 2006. "Random recursive partitioning: a matching method for the estimation of the average treatment effect," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1018, Universitá degli Studi di Milano.
  9. Geroski, P. A. & Van Reenen, J. & Walters, C. F., 1997. "How persistently do firms innovate?," Research Policy, Elsevier, vol. 26(1), pages 33-48, March.
  10. Steven Klepper, 2002. "Firm Survival and the Evolution of Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 37-61, Spring.
  11. Audretsch, David B., 1995. "Innovation, growth and survival," International Journal of Industrial Organization, Elsevier, vol. 13(4), pages 441-457, December.
  12. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
  13. Stefano Iacus & Gary King & Giuseppe Porro, 2008. "Matching for Causal Inference Without Balance Checking," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1073, Universitá degli Studi di Milano.
  14. Sascha O. Becker & Andrea Ichino, 2002. "Estimation of average treatment effects based on propensity scores," Stata Journal, StataCorp LP, vol. 2(4), pages 358-377, November.
  15. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
  16. Van Reenen, John, 1997. "Employment and Technological Innovation: Evidence from U.K. Manufacturing Firms," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 255-84, April.
  17. Roberto Alvarez & Raymond Robertson, 2004. "Exposure to foreign markets and plant-level innovation: evidence from Chile and Mexico," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 13(1), pages 57-87.
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