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

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

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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Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP480.

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Date of creation: Apr 2014
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Handle: RePEc:esr:wpaper:wp480
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  1. Bruno Crépon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation and Productivity : An Econometric Analysis at the Firm Level," Working Papers 98-33, Centre de Recherche en Economie et Statistique.
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  17. Paula Bustos, 2009. "Trade liberalization, exports and technology upgrading: Evidence on the impact of MERCOSUR on Argentinean firms," Economics Working Papers 1173, Department of Economics and Business, Universitat Pompeu Fabra.
  18. Zvi Griliches, 1995. "The Discovery of the Residual: An Historical Note," NBER Working Papers 5348, National Bureau of Economic Research, Inc.
  19. repec:fth:inseep:9833 is not listed on IDEAS
  20. Sanghoon Ahn, 2002. "Competition, Innovation and Productivity Growth: A Review of Theory and Evidence," OECD Economics Department Working Papers 317, OECD Publishing.
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