The Dynamics of Innovation Strategies

Bart Verspagen and Tommy Clausen

in Innovation and Growth

Published in print September 2012 | ISBN: 9780199646685
Published online January 2013 | e-ISBN: 9780191748998 | DOI:
The Dynamics of Innovation Strategies

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This chapter investigates the effect of innovation on the productivity of firms when two technological paths are available: product innovation on the one hand, and process innovation on the other. This is done by estimating a nonlinear multiple-equation econometric model, which allows us to control for both selection and endogeneity. The results suggest that process innovation appears as the main driver of labour productivity in the manufacturing industry, but it is difficult to disentangle the respective effects of product and process innovation. Both types of innovation actually seem to capture ‘overall’ innovation, and when a single indicator of innovation is used, it always has a significantly positive impact on labour productivity, both in the manufacturing industry and in the services.

Keywords: innovation; productivity; firms; product innovation; process innovation

Chapter.  8229 words. 

Subjects: Financial Markets

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