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Does Innovation Help the Good or the Poor Performing Firms?

Author

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  • Joze P. Damijan
  • Crt Kostevc
  • Matija Rojec

Abstract

Using firm-level innovation data for a large sample of Slovenian firms in the period 1996-2002, the paper finds surprising results that innovation is not benefitting all firms. We find that only manufacturing firms with below average productivity growth (the lowest four deciles) are likely to experience significant benefits from successful innovation, while faster growing firms do not extract any additional benefits from innovation. This evidence demonstrates how innovation can affect the observed convergence of firms in terms of productivity in the manufacturing sector.

Suggested Citation

  • Joze P. Damijan & Crt Kostevc & Matija Rojec, 2009. "Does Innovation Help the Good or the Poor Performing Firms?," LICOS Discussion Papers 23009, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:23009
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp230.pdf
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    References listed on IDEAS

    as
    1. Pierre Mohnen & Jacques Mairesse & Marcel Dagenais, 2006. "Innovativity: A comparison across seven European countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 391-413.
    2. Jacques Mairesse, 2008. "Employment, innovation, and productivity: evidence from Italian microdata," Industrial and Corporate Change, Oxford University Press, vol. 17(4), pages 813-839, August.
    3. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2005. "Does innovation stimulate employment? A firm-level analysis using comparable micro data on four European countries," MPRA Paper 1245, University Library of Munich, Germany.
    4. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
    5. 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.
    6. Parisi, Maria Laura & Schiantarelli, Fabio & Sembenelli, Alessandro, 2006. "Productivity, innovation and R&D: Micro evidence for Italy," European Economic Review, Elsevier, vol. 50(8), pages 2037-2061, November.
    7. Sanghoon Ahn, 2001. "Firm Dynamics and Productivity Growth: A Review of Micro Evidence from OECD Countries," OECD Economics Department Working Papers 297, OECD Publishing.
    8. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    9. Jan Eeckhout & Boyan Jovanovic, 2002. "Knowledge Spillovers and Inequality," American Economic Review, American Economic Association, vol. 92(5), pages 1290-1307, December.
    10. repec:crs:wpaper:9833 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Piacentino, Davide, 2012. "Micro evidence for sources of innovation in European countries," MPRA Paper 39110, University Library of Munich, Germany.
    2. Nicolau, Juan Luis & Santa-María, María Jesús, 2013. "Communicating excellence in innovation," Economics Letters, Elsevier, vol. 118(1), pages 87-90.
    3. Juan A. Máñez & María E. Rochina-Barrachina & Juan A. Sanchis-Llopis & Oscar Vicente, 2013. "Financial constraints and Spanish manufacturing firms’ R&D and exporting," Working Papers 1324, Department of Applied Economics II, Universidad de Valencia.
    4. repec:eee:wdevel:v:99:y:2017:i:c:p:75-94 is not listed on IDEAS
    5. Caterina Santi & Pietro Santoleri, 2017. "Exploring the link between innovation and growth in Chilean firms," Small Business Economics, Springer, vol. 49(2), pages 445-467, August.
    6. Doran, Justin & Ryan, Geraldine, 2014. "Firms’ skills as drivers of radical and incremental innovation," Economics Letters, Elsevier, vol. 125(1), pages 107-109.

    More about this item

    Keywords

    research and development; innovation; knowledge spillovers; productivity growth;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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