Demand and innovation: theory and evidence

Arbeitspapier

While the extant innovation literature has provided extensive evidence of the so-called "demand-pull" effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: GLO Discussion Paper ; No. 92

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives
• Subject: technological change ; R&D ; demand-pull innovation ; dynamic two tobit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dawid, Herbert ; Pellegrino, Gabriele ; Vivarelli, Marco
• Event: Veröffentlichung
• (who): Global Labor Organization (GLO)
• (where): Maastricht
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/163001
• Last update: 10.03.2025, 11:42 AM CET