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Innovation and firm growth in "complex technology" sectors: a quantile regression approach

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  • Alex Coad

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Max Planck Institute of Economics - Max-Planck-Gesellschaft)

  • Rekha Rao

    (Max Planck Institute of Economics - Max-Planck-Gesellschaft)

Abstract

Innovation is commonly seen as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four «complex technology» sectors. The average firm, which experiences only modest growth, may grow for a number of reasons that may or may not be related to «innovativeness». However, given that firms are heterogeneous and that growth rates distributions are typically heavy-tailed, it may be misleading to use regression techniques that focus on the average firm. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of «superstar» fast-growth firms.

Suggested Citation

  • Alex Coad & Rekha Rao, 2006. "Innovation and firm growth in "complex technology" sectors: a quantile regression approach," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00118797, HAL.
    • Handle: RePEc:hal:cesptp:halshs-00118797
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00118797
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    Cited by:

    1. Deschryvere, Matthias, 2008. "High Growth Firms and Job Creation in Finland," Discussion Papers 1144, The Research Institute of the Finnish Economy.
    2. Alexander Coad & Rekha Rao, 2007. "The Employment Effects of Innovations in High-Tech Industries," Papers on Economics and Evolution 2007-05, Philipps University Marburg, Department of Geography.
    3. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    4. repec:ebl:ecbull:v:15:y:2006:i:13:p:1-10 is not listed on IDEAS
    5. Erik Stam & Karl Wennberg, 2009. "The roles of R&D in new firm growth," Small Business Economics, Springer, vol. 33(1), pages 77-89, June.

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    More about this item

    Keywords

    quantile regression; firm growth; Innovation; croissance des firmes; régression par quantile;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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