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Firm Survival and Innovation: Knowledge Context Matters!

Author

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  • Fernanda Mazzotta

    () (Università di Salerno)

  • Ornella Wanda Maietta

    () (Università di Napoli Federico II and CSEF)

Abstract

The aim of this paper is to explore the differential effect of innovation on firm survival. We consider the effect of product, process and organisational innovations controlling for the role of the knowledge context and of firm absorptive capacity. At the end of the 1990s, an ad hoc survey was performed on a representative sample of manufacturing firms located in a NUTS3 area of southern Italy, and information on firm survival has been collected for 15 years. A multivariate endogenous probit model is applied to simultaneously analyse the determinants of innovation and of subsequent firm survival. Our estimates confirm that process innovation is a determinant of firm survival followed by product innovation, whereas evidence of a more novel type suggests that organisational innovation plays only a weak role. Entrepreneurial general and specific human capital exerts no direct beneficial effect on firm duration. The requirement of proper technological knowledge from the local university has been the driver of firm duration with the highest marginal effect.

Suggested Citation

  • Fernanda Mazzotta & Ornella Wanda Maietta, 2018. "Firm Survival and Innovation: Knowledge Context Matters!," CSEF Working Papers 496, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
  • Handle: RePEc:sef:csefwp:496
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    File URL: http://www.csef.it/WP/wp496.pdf
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    Keywords

    Firm survival; Information network; Human capital; Italian SMEs;

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • I2 - Health, Education, and Welfare - - Education

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