Innovation Strategies and Firm Growth

In this work, we explore the relations between sales growth and a set of innovation indicators that capture the different sources, modes and results of the innovative activity undertaken within firms. We exploit a rich panel on innovation activity of Spanish manufacturing firms, reporting detailed CIS-type information continuously over the period 2004-2011. Standard GMM-panel estimates of the average effect of innovation activities reveal significant and positive effect for internal R&D, while no effect is found for external sourcing of knowledge (external R&D, acquisition of embodied and disembodied technologies) as well as for output of innovation (process and product innovation). However, fixed-effects quantile regressions reveal that innovation activities, apart from process innovation and disembodied technical change, display a positive effect on high-growth performance.
Finally, we find evidence of super-modularity of the growth function, revealing complementarities of internal R&D with product innovation, and between product and process innovation.


Innovation Strategies and Firm Growth

Stefano Bianchini
BETA, University of Strasbourg

Gabriele Pellegrino
World Intellectual Property Organization
Ecole Polytechnique Federale de Lausanne

Federico Tamagni
Scuola Superiore Sant’Anna

Working Paper
03A/2016 February