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The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms

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  • Criscuolo, Paola
  • Nicolaou, Nicos
  • Salter, Ammon

Abstract

Despite the widely acknowledged role of start-ups in economic development, little is known about their innovative activities compared with those of established firms. Drawing on a sample of 12,209 UK firms, we differentiate between services and manufacturing firms and, using a matching estimator approach, demonstrate that start-ups differ significantly from established firms in their innovation activities. We find that in services, being a start-up increases the likelihood of product innovations. However, in manufacturing, we find no significant differences in the likelihood of product innovation between start-ups and established firms. When examining the returns to innovation, we find that start-ups have a significant advantage both in services and in manufacturing. We explore the implications of these results for theory and policy.

Suggested Citation

  • Criscuolo, Paola & Nicolaou, Nicos & Salter, Ammon, 2012. "The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms," Research Policy, Elsevier, vol. 41(2), pages 319-333.
    • Handle: RePEc:eee:respol:v:41:y:2012:i:2:p:319-333
    DOI: 10.1016/j.respol.2011.12.001
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