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

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Innovation is commonly seeb as the principal engine of economic development. In this paper, we investigate the microfoundationsof 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 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

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  • Alex Coad & Rekha Rao, 2006. "Innovation and firm growth in "complex technology" sectors: a quantile regression approach," Cahiers de la Maison des Sciences Economiques r06050, Université Panthéon-Sorbonne (Paris 1).
    • Handle: RePEc:mse:wpsorb:r06050
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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

    Innovation; firm growth; quantile regression;
    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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