IDEAS home Printed from https://ideas.repec.org/p/col/000178/012630.html
   My bibliography  Save this paper

The Virtuous Circle of Innovation in Italian Firms

Author

Listed:
  • Francesco Bogliacino
  • Matteo Lucchesex
  • Leopoldo Nascia
  • Mario Pianta

Abstract

The “virtuous circle” between innovative inputs, outputs and economic performance is investigated in this article with a three equation model highlighting feedback loops and simultaneous relations. An empirical test is carried out considering innovative expenditure, innovative turnover and economic results in a sample of Italian manufacturing firms which are ‘serial innovators’. We use data for the period 2000-2008 from a rich panel of Italian firms over 50 employees drawn from ISTAT, the National Institute of Statistics, including data from three waves of Community Innovation Surveys. The model we use extends the one developed at the industry level by Bogliacino and Pianta (2013a, 2013b), confirming previous findings. For the – rather limited – core of Italian persistent innovators, results show the complex links at play, the lags in the effects of innovative efforts, and the feedbacks between economic success and the ability to sustain innovation expenditure.

Suggested Citation

  • Francesco Bogliacino & Matteo Lucchesex & Leopoldo Nascia & Mario Pianta, 2015. "The Virtuous Circle of Innovation in Italian Firms," Documentos de Trabajo, Escuela de Economía 12630, Universidad Nacional de Colombia, FCE, CID.
    • Handle: RePEc:col:000178:012630
    as

    Download full text from publisher

    File URL: http://www.fce.unal.edu.co/centro-editorial/docs/escuela-de-economia/56-the-virtuous-circle-of-innovation-in-italian-firms
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Interfirm heterogeneity: nature, sources and consequences for industrial dynamics. An introduction," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00642680, HAL.
    2. Reinganum, Jennifer F, 1983. "Uncertain Innovation and the Persistence of Monopoly," American Economic Review, American Economic Association, vol. 73(4), pages 741-748, September.
    3. Giovanni Dosi & Sébastien Lechevalier & Angelo Secchi, 2010. "Introduction: Interfirm heterogeneity--nature, sources and consequences for industrial dynamics," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1867-1890, December.
    4. Jacques Mairesse & Pierre Mohnen, 2002. "Accounting for Innovation and Measuring Innovativeness: An Illustrative Framework and an Application," American Economic Review, American Economic Association, vol. 92(2), pages 226-230, May.
    5. Giulio Bottazzi & Giovanni Dosi & Nadia Jacoby & Angelo Secchi & Federico Tamagni, 2010. "Corporate performances and market selection: some comparative evidence," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(6), pages 1953-1996, December.
    6. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
    7. Dario Guarascio & Mario Pianta & Francesco Bogliacino, 2017. "Export, R&D and New Products: A Model and a Test on European Industries," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 393-432, Springer.
    8. Michele Cincera & Julien Ravet, 2010. "Financing constraints and R&D investments of large corporations in Europe and the US," Science and Public Policy, Oxford University Press, vol. 37(6), pages 455-466, July.
    9. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    10. Boeri, Tito & Jimeno, Juan F., 2005. "The effects of employment protection: Learning from variable enforcement," European Economic Review, Elsevier, vol. 49(8), pages 2057-2077, November.
    11. Bronwyn Hall, 2004. "The financing of research and development," Chapters, in: Anthony Bartzokas & Sunil Mani (ed.), Financial Systems, Corporate Investment in Innovation, and Venture Capital, chapter 2, Edward Elgar Publishing.
    12. 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).
    13. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    14. Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, vol. 33(1), pages 13-33, June.
    15. Klepper, Steven, 1997. "Industry Life Cycles," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 6(1), pages 145-181.
    16. Pellegrino, Gabriele & Piva, Mariacristina & Vivarelli, Marco, 2012. "Young firms and innovation: A microeconometric analysis," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 329-340.
    17. Antonelli, Cristiano & Crespi, Francesco & Scellato, Giuseppe, 2012. "Inside innovation persistence: New evidence from Italian micro-data," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 341-353.
    18. Michele Cincera & Reinhilde Veugelers, 2013. "Young leading innovators and the EU's R&D intensity gap," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(2), pages 177-198, March.
    19. Eleonora Bartoloni, 2012. "The persistence of innovation: a panel data investigation on manufacturing firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(6), pages 787-810, April.
    20. Franco Malerba, 2007. "Innovation and the evolution of industries," Springer Books, in: Uwe Cantner & Franco Malerba (ed.), Innovation, Industrial Dynamics and Structural Transformation, pages 7-27, Springer.
    21. Jacques Mazier & Vincent Duwicquet & Jamel Saadaoui & Pascal Petit, 2015. "The future of the euro," Post-Print hal-01367909, HAL.
    22. 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.
    23. Pascal Petit & Luc Soete (ed.), 2001. "Technology and the Future of European Employment," Books, Edward Elgar Publishing, number 2188.
    24. Bronwyn H. Hall & Francesca Lotti & Jacques Mairesse, 2013. "Evidence on the impact of R&D and ICT investments on innovation and productivity in Italian firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 22(3), pages 300-328, April.
    25. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    26. Arthur, W Brian, 1989. "Competing Technologies, Increasing Returns, and Lock-In by Historical Events," Economic Journal, Royal Economic Society, vol. 99(394), pages 116-131, March.
    27. Mariacristina Piva & Marco Vivarelli, 2007. "Is demand-pulled innovation equally important in different groups of firms?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 31(5), pages 691-710, September.
    28. Malerba,Franco & Brusoni,Stefano (ed.), 2007. "Perspectives on Innovation," Cambridge Books, Cambridge University Press, number 9780521866644, September.
    29. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters, in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626, National Bureau of Economic Research, Inc.
    30. Dasgupta, Partha & Stiglitz, Joseph, 1980. "Industrial Structure and the Nature of Innovative Activity," Economic Journal, Royal Economic Society, vol. 90(358), pages 266-293, June.
    31. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    32. Mowery, David & Rosenberg, Nathan, 1993. "The influence of market demand upon innovation: A critical review of some recent empirical studies," Research Policy, Elsevier, vol. 22(2), pages 107-108, April.
    33. Laura Bottazzi & Giovanni Peri, 2007. "The International Dynamics of R&D and Innovation in the Long Run and in The Short Run," Economic Journal, Royal Economic Society, vol. 117(518), pages 486-511, March.
    34. Anna Giunta & Domenico Scalera & Francesco Trivieri & Jeffrey B. Nugent & Mariarosaria Agostino, 2011. "Firm Productivity, Organizational Choice and Global Value Chain," Working Papers 2011R09, Orkestra - Basque Institute of Competitiveness.
    35. Carlo Milana & Leopoldo Nascia & Alessandro Zeli, 2013. "Decomposing multifactor productivity in Italy from 1998 to 2004: evidence from large firms and SMEs using DEA," Journal of Productivity Analysis, Springer, vol. 40(1), pages 99-109, August.
    36. Giovanni Dosi & Marco Grazzi & Chiara Tomasi & Alessandro Zeli, 2012. "Turbulence underneath the big calm? The micro-evidence behind Italian productivity dynamics," Small Business Economics, Springer, vol. 39(4), pages 1043-1067, November.
    37. Universities-National Bureau Committee for Economic Research & Committee on Economic Growth of the Social Science Research Council, 1962. "The Rate and Direction of Inventive Activity: Economic and Social Factors," NBER Books, National Bureau of Economic Research, Inc, number univ62-1.
    38. Paul Geroski & Steve Machin & John Van Reenen, 1993. "The Profitability of Innovating Firms," RAND Journal of Economics, The RAND Corporation, vol. 24(2), pages 198-211, Summer.
    39. Margherita Velucchi & Alessandro Viviani, 2011. "Determinants of the Italian labor productivity: a quantile regression approach," Statistica, Department of Statistics, University of Bologna, vol. 71(2), pages 213-238.
    40. Malerba,Franco & Brusoni,Stefano (ed.), 2007. "Perspectives on Innovation," Cambridge Books, Cambridge University Press, number 9780521685610, September.
    41. Alex Coad & Rekha Rao, 2010. "Firm growth and R&D expenditure," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 19(2), pages 127-145.
    42. Kleinknecht, Alfred & Verspagen, Bart, 1990. "Demand and innovation: Schmookler re-examined," Research Policy, Elsevier, vol. 19(4), pages 387-394, August.
    43. 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.
    44. Francesco Bogliacino & Dario Guarascio & Mario Pianta, 2015. "Export, R&D and New Products," Documentos de Trabajo, Escuela de Economía 12653, Universidad Nacional de Colombia, FCE, CID.
    45. Francesco Crespi & Mario Pianta, 2008. "New Processes and New Products in Europe and Italy," Rivista di Politica Economica, SIPI Spa, vol. 98(2), pages 119-146, March-Apr.
    46. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    47. Elena Cefis & Matteo Ciccarelli, 2005. "Profit differentials and innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 14(1-2), pages 43-61.
    48. Nicholas Bloom & John Van Reenen, 2002. "Patents, Real Options and Firm Performance," Economic Journal, Royal Economic Society, vol. 112(478), pages 97-116, March.
    49. Pitelis, Christos (ed.), 2002. "The Growth of the Firm: The Legacy of Edith Penrose," OUP Catalogue, Oxford University Press, number 9780199248520.
    50. Jean O. Lanjouw & Mark Schankerman, 2004. "Patent Quality and Research Productivity: Measuring Innovation with Multiple Indicators," Economic Journal, Royal Economic Society, vol. 114(495), pages 441-465, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Heredia Pérez, Jorge A. & Geldes, Cristian & Kunc, Martin H. & Flores, Alejandro, 2019. "New approach to the innovation process in emerging economies: The manufacturing sector case in Chile and Peru," Technovation, Elsevier, vol. 79(C), pages 35-55.
    2. de-Oliveira, Fernando & Rodil-Marzábal, Óscar, 2019. "Structural characteristics and organizational determinants as obstacles to innovation in small developing countries," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 306-314.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dario Guarascio & Mario Pianta & Francesco Bogliacino, 2017. "Export, R&D and New Products: A Model and a Test on European Industries," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 393-432, Springer.
    2. Bogliacino, Francesco & Cardona, Sebastian Gómez, 2014. "Capabilities and investment in R&D: An analysis on European data," Structural Change and Economic Dynamics, Elsevier, vol. 31(C), pages 101-111.
    3. Dario Guarascio & Mario Pianta & Matteo Lucchese & Francesco Bogliacino, 2015. "Business cycles, technology and exports," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 32(2), pages 167-200, August.
    4. Dosi, Giovanni & Nelson, Richard R., 2010. "Technical Change and Industrial Dynamics as Evolutionary Processes," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 51-127, Elsevier.
    5. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    6. Juan Máñez & María Rochina-Barrachina & Amparo Sanchis-Llopis & Juan Sanchis-Llopis, 2015. "The determinants of R&D persistence in SMEs," Small Business Economics, Springer, vol. 44(3), pages 505-528, March.
    7. Guarascio, Dario & Tamagni, Federico, 2019. "Persistence of innovation and patterns of firm growth," Research Policy, Elsevier, vol. 48(6), pages 1493-1512.
    8. García-Quevedo, José & Pellegrino, Gabriele & Vivarelli, Marco, 2014. "R&D drivers and age: Are young firms different?," Research Policy, Elsevier, vol. 43(9), pages 1544-1556.
    9. Stefano Bianchini & Federico Tamagni & Gabriele Pellegrino, 2016. "Innovation strategies and firm growth," Working Papers 2016/10, Institut d'Economia de Barcelona (IEB).
    10. Emanuele Brancati & Raffaele Brancati & Dario Guarascio & Andrea Maresca & Manuel Romagnoli & Antonello Zanfei, 2018. "Firm-level Drivers of Export Performance and External Competitiveness in Italy," European Economy - Discussion Papers 087, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    11. Barge-Gil, Andrés & López, Alberto, 2014. "R&D determinants: Accounting for the differences between research and development," Research Policy, Elsevier, vol. 43(9), pages 1634-1648.
    12. Giovanni Dosi & Richard Nelson, 2013. "The Evolution of Technologies: An Assessment of the State-of-the-Art," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 3-46, June.
    13. Cristiano Antonelli, 2011. "The Economic Complexity of Technological Change: Knowledge Interaction and Path Dependence," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 1, Edward Elgar Publishing.
    14. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    15. Aronica, Martina & Fazio, Giorgio & Piacentino, Davide, 2022. "A micro-founded approach to regional innovation in Italy," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    16. Edeh, Jude N. & Acedo, Francisco J., 2021. "External supports, innovation efforts and productivity: Estimation of a CDM model for small firms in developing countries," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    17. Ilaria Gandin & Claudio Cozza, 2019. "Can we predict firms’ innovativeness? The identification of innovation performers in an Italian region through a supervised learning approach," PLOS ONE, Public Library of Science, vol. 14(6), pages 1-16, June.
    18. Francesco Bogliacino & Mario Pianta, 2016. "The Pavitt Taxonomy, revisited: patterns of innovation in manufacturing and services," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(2), pages 153-180, August.
    19. Andrés Barge-Gil & Alberto López, 2015. "R versus D: estimating the differentiated effect of research and development on innovation results," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 24(1), pages 93-129.
    20. Cincera, Michele & Ince, Ela & Santos, Anabela, 2024. "Revisiting the innovation-competition nexus: Evidence from worldwide manufacturing and service industries," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 586-603.

    More about this item

    Keywords

    Innovation; economic performance; three equation model; Italian firms;
    All these keywords.

    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L8 - Industrial Organization - - Industry Studies: Services
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:col:000178:012630. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Facultad de Ciencias Económicas Unal (email available below). General contact details of provider: https://edirc.repec.org/data/funalco.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.