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Innovation and Productivity in Services:Evidence from Germany, Ireland and the United Kingdom

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  • Peters, Bettina
  • Riley, Rebecca
  • Siedschlag, Iulia
  • Vahter, Priit
  • McQuinn, John

Abstract

We examine the links between innovation investment, innovation output and productivity in service enterprises. For this purpose, we use micro data from the Community Innovation Surveys 2006-2008 in Germany, Ireland, and the United Kingdom and estimate an augmented structural model which links innovation inputs, innovation outputs and productivity. Our estimates suggest that innovation in service enterprises was linked to higher productivity. In all three countries analysed, amongst the innovation types that we consider, the strongest link between innovation and productivity was found for marketing innovations. Successful innovation in service enterprises appears to be associated with enterprise size, innovation expenditure intensity (in Germany and the United Kingdom), foreign ownership (Ireland), exporting and engagement in co-operation for innovation activities. The determinants of innovation in service enterprises appear remarkably similar to the determinants of innovation in manufacturing enterprises.

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  • Peters, Bettina & Riley, Rebecca & Siedschlag, Iulia & Vahter, Priit & McQuinn, John, 2014. "Innovation and Productivity in Services:Evidence from Germany, Ireland and the United Kingdom," Papers WP480, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esr:wpaper:wp480
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    2. Audretsch, David & Hafenstein, Marian & Kritikos, Alexander S. & Schiersch, Alexander, 2018. "Firm Size and Innovation in the Service Sector," IZA Discussion Papers 12035, Institute of Labor Economics (IZA).
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    4. Busom, Isabel & Vélez-Ospina, Jorge Andrés, 2017. "Innovation, Public Support, and Productivity in Colombia. A Cross-industry Comparison," World Development, Elsevier, vol. 99(C), pages 75-94.
    5. Szczygielski, Krzysztof & Grabowski, Wojciech & Pamukcu, Mehmet Teoman & Tandogan, Vedat Sinan, 2017. "Does government support for private innovation matter? Firm-level evidence from two catching-up countries," Research Policy, Elsevier, vol. 46(1), pages 219-237.
    6. Tanel Rebane, 2018. "Complementarities In Performance Between Product Innovation, Marketing Innovation And Cooperation With Clients," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 113, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    7. Luísa Ferreira Lopes & Manuel Mira Godinho, 2019. "Innovation and Productivity in Services: A Methodological Approach," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(05), pages 1-26, August.

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    More about this item

    Keywords

    Internationalisation of services; innovation; productivity;
    All these keywords.

    JEL classification:

    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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