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Understanding Innovative Firms: An Empirical Analysis of the GAPS


  • Mark Rogers

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)


This paper uses data from the Growth and Performance Survey of Australian firms to investigate the determinants of innovation. The measure of innovation is based on whether the firm introduced a new product or process in 1997. Various determinants are investigated including market structure, export status, the use of networks, and training. Regression analysis is conducted separately for manufacturing and non- manufacturing firms, and within each sector by firm size groups. Overall, the results show there is persistence in innovative activities (i.e. firms that innovated in 1995 are more likely to innovation in 1997); small manufacturing firms which use networks tend to be more innovative; and medium sized manufacturing firms that export are also more innovative. However, the main conclusion of the analysis is that many of the explanatory variables are not significant. Moreover, the results vary dramatically across firm size and sector, suggesting that the process of innovation is complex.

Suggested Citation

  • Mark Rogers, 2000. "Understanding Innovative Firms: An Empirical Analysis of the GAPS," Melbourne Institute Working Paper Series wp2000n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2000n08

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    References listed on IDEAS

    1. David B. Audretsch & Marco Vivarelli, 1994. "Small firms and R&D spillovers : Evidence from Italy," Revue d'Économie Industrielle, Programme National Persée, vol. 67(1), pages 225-237.
    2. Acs, Zoltan J. & Audretsch, David B., 1987. "Innovation in large and small firms," Economics Letters, Elsevier, vol. 23(1), pages 109-112.
    3. Karlsson, Charlie & Olsson, Ola, 1998. "Product Innovation in Small and Large Enterprises," Small Business Economics, Springer, vol. 10(1), pages 31-46, February.
    4. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107 Elsevier.
    5. Tether, B. S., 1998. "Small and large firms: sources of unequal innovations?," Research Policy, Elsevier, vol. 27(7), pages 725-745, November.
    6. Natalia Nunes & Geoffrey Crockett & Peter Dawkins, 1993. "The Impact of Competition and Trade Unions on Workplace Reform and Organisational and Technological Change," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 26(2), pages 71-88.
    7. Daron Acemoglu, 1997. "Training and Innovation in an Imperfect Labour Market," Review of Economic Studies, Oxford University Press, vol. 64(3), pages 445-464.
    8. James Love & Stephen Roper, 1999. "The Determinants of Innovation: R & D, Technology Transfer and Networking Effects," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 15(1), pages 43-64, August.
    9. Freeman, C., 1991. "Networks of innovators: A synthesis of research issues," Research Policy, Elsevier, vol. 20(5), pages 499-514, October.
    10. George Symeonidis, 1996. "Innovation, Firm Size and Market Structure: Schumpeterian Hypotheses and Some New Themes," OECD Economics Department Working Papers 161, OECD Publishing.
    11. Sako, Mari, 1999. "From Individual Skills to Organizational Capability in Japan," Oxford Review of Economic Policy, Oxford University Press, vol. 15(1), pages 114-126, Spring.
    12. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-344, March.
    13. Lefebvre, Elisabeth & Lefebvre, Louis A & Bourgault, Mario, 1998. "R&D-Related Capabilities as Determinants of Export Performance," Small Business Economics, Springer, vol. 10(4), pages 365-377, June.
    14. Acs, Zoltan J. & Isberg, Steven C., 1991. "Innovation, firm size and corporate finance : An initial inquiry," Economics Letters, Elsevier, vol. 35(3), pages 323-326, March.
    15. Mark Rogers, 2002. "The Influence of Diversification and Market Structure on the R&D Intensity of Large Australian Firms," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(2), pages 155-172.
    16. Almeida, Paul & Kogut, Bruce, 1997. "The Exploration of Technological Diversity and the Geographic Localization of Innovation," Small Business Economics, Springer, vol. 9(1), pages 21-31, February.
    17. Paul Bishop & Nick Wiseman, 1999. "External ownership and innovation in the United Kingdom," Applied Economics, Taylor & Francis Journals, vol. 31(4), pages 443-450.
    18. Richard Blundell & Rachel Griffith & John van Reenen, 1999. "Market Share, Market Value and Innovation in a Panel of British Manufacturing Firms," Review of Economic Studies, Oxford University Press, vol. 66(3), pages 529-554.
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    Cited by:

    1. Dhamvithee, Pisit & Shankar, Bhavani & Jangchud, Anuvat & Wuttijumnong, Phaisarn, 2005. "New Product Development in Thai Agro-Industry: Explaining the Rates of Innovation and Success in Innovation," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 8(03).
    2. Craig Lofts & Joanne Loundes, 2000. "Foreign Ownership, Foreign Competition and Innovation in Australian Enterprises," Melbourne Institute Working Paper Series wp2000n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

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