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Product Innovation and Survival in a High-Tech Industry

  • Roberto Fontana

    (Department of Economics, University of Pavia and CESPRI - Bocconi University, Milan, Italy.)

  • Lionel Nesta

    (Observatoire Fran»cais des Conjonctures Economiques, D¶epartement de Recherche sur l'Innovation et la Concurrence, Valbonne, France.)

We investigate the relationship between product innovation and firm survival for a sample of 121 firms in a high-tech industry. We find that location near the technological frontier is an important determinant of fim survival. Firms located near the frontier are also more likely to be acquired than to exit by failure if they cannot survive. This suggests that product location in the technology space acts as a signal of firm quality. Possessing a substantial stock of intangible capital, on the other hand, determines neither exit via failure nor exit via acquisition, although it increases the probability of surviving.

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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 208.

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Length: pages 34
Date of creation: Dec 2007
Date of revision: Dec 2007
Handle: RePEc:cri:cespri:wp208
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