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on Technology and Industrial Dynamics |
| By: | Xiaodan Yu; Giovanni Dosi; Marco Grazzi; Jiasu Lei |
| Abstract: | This article explores the dynamics of market selection by investigating of the relationships linking productivity, profitability, investment and growth, based on China's manufacturing firm-level dataset over the period 1998-2007. First, we find that productivity variations, rather than relative levels, are the dominant productivity-related determinant of firm growth, and account for 15%-20% of the variance in firms' growth rates. The direct relation between profitability and firm growth is much weaker as it contributes for less than 5% to explain the different patterns of firm growth. On the other hand, the profitability-growth relationship is mediated via investment. Firm's contemporaneous and lagged profitabilities display positive and significant effect on the probability to report an investment spike, and, in turn, investment activity is related to higher firm growth. |
| Keywords: | Productivity, Market selection, Profitability, Investment spike, Firm growth, Chinese economy |
| Date: | 2015–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2015/03&r=tid |
| By: | Daunfeldt, Sven-Olof (HUI Research); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Johansson, Dan (HUI Research) |
| Abstract: | It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all 4-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital. |
| Keywords: | Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D |
| JEL: | L11 L25 |
| Date: | 2015–03–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1062&r=tid |
| By: | Marina Rybalka (Statistics Norway) |
| Abstract: | Business innovation is an important driver of productivity growth. In this paper, I assess the importance of R&D and ICT investment for firm performance in the manufacturing and service industries. Explicitly, I use an extended version of the CDM model that treats ICT together with R&D as the main inputs into innovation and productivity, and test it on a large unbalanced panel data set based on the innovation survey for Norway. Four different types of innovation and the number of patent applications are used as innovation output measures. I find that ICT investment is strongly associated with all types of innovation in both sectors, with the result being strongest for product innovation in manufacturing and for process innovation in service industries. The impact of ICT on patenting is only positive in manufacturing. Overall, ICT seems to be less important than R&D for innovation, but more important for productivity. These results support the proposition that ICT is an important driver of productivity growth. Given the high rate of ICT diffusion in Norway, my results also contribute to explaining what is referred to as the ‘Norwegian productivity puzzle’, i.e. the fact that Norway is one of the most productive economies in the OECD despite having relatively low R&D intensity. |
| Keywords: | Innovation; ICT; R&D; Productivity; CDM model; Manufacturing and Services |
| JEL: | D24 L60 L80 O3 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:801&r=tid |
| By: | Isabel Busom (Departament d’Economia Aplicada, Universitat Autonama de Barcelona); Beatriz Corchuelo (Universidad de Extremadura, Departamento de Economía); Ester Martínez-Ros (Universidad Carlos III de Madrid, Departamento de Economía de la Empresa) |
| Abstract: | We provide comparative evidence on R&D tax credit and subsidy programs by studying whether firms' participation in each program exhibits state dependence and whether cross program interactions exist and are significant. We use a panel of manufacturing Spanish firms, which could use both types of support, to estimate a random effects bivariate dynamic probit model of program participation. We find that true state dependence of participation in R&D subsidy and tax credit programs accounts respectively for about 55% and 60% of observed persistence. In contrast, we do not find evidence of cross program interaction, suggesting that each tool is used by firms with different profiles. Digging on the role of some observable variables, we find that both programs reach on average stable R&D performers, and that they do not foster participation of young firms relative to older ones. We also identify significant differences across programs: while diversified and commercially successful firms are more likely to use tax incentives, those with high productivity are more likely to obtain subsidies. We discuss some policy implications of these findings |
| Keywords: | R&D, innovation policy, tax incentives, subsidies, persistence, dynamic random effects, bivariate probit |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1503&r=tid |
| By: | Francesco Bogliacino; Dario Guarascio; Mario Pianta |
| Abstract: | In this article we extend the model developed by Bogliacino and Pianta (2013a, 2013b) on the link between R&D, innovation and economic performance, considering the impact of innovation of export success. We develop a simultaneous three equation model in order to investigate the existence of a ‘virtuous circle’ between industries’ R&D, share of product innovators and export market shares. We investigate empirically – at the industry level – three key relationships affecting the dynamics of innovation and export performance: first, the capacity of firms to translate their R&D efforts in new products; second, the role of innovation as a determinant of export market shares; third, the export success as a driver of new R&D efforts. The model is tested for 38 manufacturing and service sectors of six European countries over three time periods from 1995 to 2010. The model effectively accounts for the dynamics of R&D efforts, innovation and international performances of European industries. Moreover, important differences across countries emerge when we split our sample in a Northern group – Germany, the Netherlands and the United Kingdom – and a Southern group – France, Italy and Spain. We find that the ‘virtuous circle’ between innovation and competitiveness holds for Northern economies only, while Southern industries fail to translate innovation efforts into export success. |
| Keywords: | Export, R&D, Innovation, Three Stages Least Squares, Europe. |
| JEL: | F12 F14 O31 O33 O52 |
| Date: | 2015–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:col:000178:012653&r=tid |