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A Comparative Perspective on Innovation and Productivity in Manufacturing and Services

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  • Lööf, Hans

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

This paper serves as another complementary link in a chain of a rather limited number of investigations in the R&D-innovation-productivity relationship within service industries. Innovation has been found to be a major contributor to productivity growth in manufacturing. In this paper, the importance of innovation is explored by comparing manufacturing and service firms in a sample of knowledge intensive industries. In particular we intend to find evidence on the following two issues. First, is there any evidence that the reported weak rate of productivity growth in knowledge intensive services can be explained by a low propensity to be innovative? Second, is it possible that knowledge intensive service firms are less efficient in deriving benefits from innovation than knowledge intensive manufacturing firms? Empirical results based on innovation survey data indicate a surprising similarity in innovation performance between the two categories of firms.

Suggested Citation

  • Lööf, Hans, 2004. "A Comparative Perspective on Innovation and Productivity in Manufacturing and Services," Working Paper Series in Economics and Institutions of Innovation 1, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0001
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    References listed on IDEAS

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    1. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    2. Baumol, William J, 1972. "Macroeconomics of Unbalanced Growth: Reply," American Economic Review, American Economic Association, vol. 62(1), pages 150-150, March.
    3. Edwin R. Dean & Kent Kunze, 1992. "Productivity Measurement in Service Industries," NBER Chapters, in: Output Measurement in the Service Sectors, pages 73-107, National Bureau of Economic Research, Inc.
    4. Paul A. Armknecht & Daniel H. Ginsburg, 1992. "Improvements in Measuring Price Changes in Consumer Services: Past, Present, and Future," NBER Chapters, in: Output Measurement in the Service Sectors, pages 109-157, National Bureau of Economic Research, Inc.
    5. Goux, Dominique & Maurin, Eric, 2000. "Returns to firm-provided training: evidence from French worker-firm matched data1," Labour Economics, Elsevier, vol. 7(1), pages 1-19, January.
    6. Cohen, Wesley M & Klepper, Steven, 1996. "A Reprise of Size and R&D," Economic Journal, Royal Economic Society, vol. 106(437), pages 925-951, July.
    7. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    8. Freeman, C., 1991. "Networks of innovators: A synthesis of research issues," Research Policy, Elsevier, vol. 20(5), pages 499-514, October.
    9. Falk, Martin & Koebel, Bertrand M., 2000. "Outsourcing of services, imported materials and the demand for heterogeneous labour : an application of a generalised box-cox function," ZEW Discussion Papers 00-51, ZEW - Leibniz Centre for European Economic Research.
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    Cited by:

    1. Agustí Segarra-Blasco & José García-Quevedo & Mercedes Teruel-Carrizosa, 2007. "Barriers to Innovation and Public Policy in Catalonia," Working Papers XREAP2007-10, Xarxa de Referència en Economia Aplicada (XREAP), revised Nov 2007.
    2. Segarra-Blasco, Agusti­ & Arauzo-Carod, Josep-Maria, 2008. "Sources of innovation and industry-university interaction: Evidence from Spanish firms," Research Policy, Elsevier, vol. 37(8), pages 1283-1295, September.
    3. Esther Gordo & Javier Jareño & Alberto Urtasun, 2006. "Radiografía del sector servicios en España," Occasional Papers 0607, Banco de España.

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    Keywords

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General
    • 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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