Is demand-pulled innovation equally important in different groups of firms?

Arbeitspapier

Previous empirical literature - mainly cross-sectional - has tested the demand-pull hypothesis and found that overall, evidence does not conflict with the idea that innovation may be driven by output. Using a balanced panel of 216 Italian manufacturing firms over the 1995-2000 period, and checking for fixed effects, time, sectoral and size dummies and for the path-dependent nature of R&D, we also find a (barely significant) role of sales in inducing R&D expenditures. However, at the micro level, the demand-pull effect plays a varying role for the different sub-samples of firms. In particular, exporting firms, those which are liquidity-constrained, those not receiving public subsidies and those not heading a business group, seem to be particularly sensitive to sales in deciding their R&D expenditures. These microeconometric results have been obtained using a Least Squares Dummy Variable Corrected (LSDVC) estimator, a recently-proposed panel data technique particularly suitable for small samples.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1982

Classification and Topics

• Classification: Wirtschaft ; Innovation and Invention: Processes and Incentives
• Subject: R&D expenditures ; demand-pull ; innovative firms ; LSDVC estimator ; Technischer Fortschritt ; Innovationsmanagement ; Input-Output ; Schätzung ; Italien

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Piva, Mariacristina ; Vivarelli, Marco
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/33546
• Last update: 10.03.2025, 11:43 AM CET