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Exploring the innovative effort: duration models and heterogeneity

Author

Listed:
  • Maria Elena Bontempi

    (University of Bologna)

  • Luca Lambertini

    (University of Bologna)

  • Giuseppe Parigi

    (Bank of Italy)

Abstract

Perseverance in R&D effort is the first fundamental step towards any kind of innovation. We investigate the beginning of the innovation story, rather than its end, through duration models. Among the drivers of our unconventional IO approach, we focus on heterogeneity, path dependence and market power, measured as elasticity of firm-specific demand. The Schumpeterian hypothesis emerges at the firm level. Heterogeneity at the industry level reveals Schumpeterian and Arrovian patterns, as well as U-shaped and inverted U-shaped patterns. We suggest considering the entire supply chain from a holistic perspective when evaluating mergers and innovation policies that support small firms by reducing their financial uncertainty and improving their institutional environment.

Suggested Citation

  • Maria Elena Bontempi & Luca Lambertini & Giuseppe Parigi, 2024. "Exploring the innovative effort: duration models and heterogeneity," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 14(3), pages 587-656, September.
    • Handle: RePEc:spr:eurasi:v:14:y:2024:i:3:d:10.1007_s40821-024-00272-9
    DOI: 10.1007/s40821-024-00272-9
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    More about this item

    Keywords

    R& D effort; Duration models; Market power; Accumulated knowledge; Heterogeneity in panel data; Uncertainty; Financing;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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