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The Relationship Between Innovation and Productivity Based on R&D and ict Use. An Empirical Analysis of Firms in Luxembourg

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  • Ludivine Martin
  • Thuc Uyen Nguyen-Thi

Abstract

This paper assesses whether Research and Development (R&D) investments and Information and Communication Technologies (ict) use play a role in determining the firm?s innovativeness and labour productivity. The estimation method is based on the three-step cdm model. Unlike most previous studies, this paper distinguishes between external and internal R&D expenditures. We also introduce different specifications of ict to capture their degree of variety, rather than aggregated measure of ict capital, as frequently applied in previous analyses. Results highlight the complexity of managing ict and R&D investments with regards to improving firm innovation. While confirming the acknowledged ?innovation enabler? role of these innovation inputs, not all increases in ict investments and R&D translate into equivalent increases in a firm?s capacity to innovate. Estimation results also confirm the positive relationship between innovation and labour productivity.

Suggested Citation

  • Ludivine Martin & Thuc Uyen Nguyen-Thi, 2015. "The Relationship Between Innovation and Productivity Based on R&D and ict Use. An Empirical Analysis of Firms in Luxembourg," Revue économique, Presses de Sciences-Po, vol. 66(6), pages 1105-1130.
    • Handle: RePEc:cai:recosp:reco_pr2_0048
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    Cited by:

    1. Lukasz Arendt & Wojciech Grabowski, 2017. "Innovations, ICT and ICT-driven labour productivity in Poland," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(4), pages 723-758, October.
    2. Huňady, Ján & Pisar, Peter & Durcekova, Ina, 2019. "Business R&D Expenditure in the ICT Sector: Effects on Business Performance Indicators," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2019), Rovinj, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 12-14 September 2019, pages 519-530, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    3. Marco Grazzi & Chiara Piccardo & Cecilia Vergari, 2020. "Concordance and complementarity in IP instruments," Industry and Innovation, Taylor & Francis Journals, vol. 27(7), pages 756-788, August.
    4. Lin, Chia-Ling & Lin, Hui-Lin & Lin, Eric S., 2016. "Is There A Complementary Relationship Between Product And Process Innovation On Productivity In Taiwanese Manufacturing Firms?," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(2), pages 139-173, December.
    5. Taisuke Matsuzaki & Hidenori Shigeno & Teruyuki Bunno & Hiroki Idota & Masatsugu Tsuji, 2023. "The Relationship Between Innovation and Corporate Performance in Japanese SMEs by Two-Stage Panel Data Analysis: Focusing on the Joint Effect of ICT and R&D," The Review of Socionetwork Strategies, Springer, vol. 17(1), pages 55-71, April.
    6. Talla Fokam, Dieu Ne Dort & Kamga, Benjamin Fomba & Nchofoung, Tii N., 2023. "Information and communication technologies and employment in developing countries: Effects and transmission channels," Telecommunications Policy, Elsevier, vol. 47(8).
    7. M. Grazzi & C. Piccardo & C. Vergari, 2019. "Concordance and complementarity in Intellectual Property instruments," Working Papers wp1127, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Craig Scott & Hubert Eng & Alexander Dubyk & Jennifer Zwicker, 2020. "Impediments to Health Innovation in Canada: Identifying Policy Barriers in Alberta’s Precision Health Innovation and Commercialization Ecosystem," SPP Research Papers, The School of Public Policy, University of Calgary, vol. 13(5), March.

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