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Innovation Strategy and Firm Performance What is the long-run impact of persistent R&D?

Author

Listed:
  • Börje, Johansson

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

  • Hans, Lööf

    (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)

Abstract

There are systematic long-run differences in the performance of firms explained by the R&D-strategy that each firm employs. Controlling for unobservable heterogeneity, past performance and other firm characteristics, this paper shows that labour productivity is, on average, 13 percent higher among firms with persistent R&D commitment and 9 percent higher among firms which make occasional R&D efforts when compared with non-R&D-firms. Furthermore, firms which employ a strategy with persistent R&D efforts are rewarded with a productivity growth rate that on average is about 2 percent higher than for other firms. The results are similar when firm performance is measured as total sales or exports per labor input.

Suggested Citation

  • Börje, Johansson & Hans, Lööf, 2010. "Innovation Strategy and Firm Performance What is the long-run impact of persistent R&D?," Working Paper Series in Economics and Institutions of Innovation 240, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    • Handle: RePEc:hhs:cesisp:0240
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    Citations

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    Cited by:

    1. Westerberg, Hans Seerar, 2014. "The Return to R&D and Seller-buyer Interactions: A Quantile Regression Approach," Ratio Working Papers 231, The Ratio Institute.
    2. Christian Le Bas & Giuseppe Scellato, 2014. "Firm innovation persistence: a fresh look at the frameworks of analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 23(5-6), pages 423-446, September.
    3. Christian Le Bas & Caroline Mothe & Thuc Uyen Nguyen-Thi, 2011. "Technological innovation persistence : Literature survey and exploration of the role of organizational innovation," Working Papers halshs-00649095, HAL.
    4. Christian Le Bas & Caroline Mothe & Thuc Uyen Nguyen-Thi, 2015. "The differentiated impacts of organizational innovation practices on technological innovation persistence," Post-Print halshs-01497289, HAL.
    5. Andersson, Martin & Baltzopoulos, Apostolos & Lööf, Hans, 2012. "R&D strategies and entrepreneurial spawning," Research Policy, Elsevier, vol. 41(1), pages 54-68.
    6. Bettina Peters & Christian Rammer, 2013. "Innovation panel surveys in Germany," Chapters, in: Fred Gault (ed.), Handbook of Innovation Indicators and Measurement, chapter 6, pages 135-177, Edward Elgar Publishing.
    7. Hans Lööf, 2011. "R&D-Persistency, Metropolitan Externalities and Productivity," ERSA conference papers ersa11p1396, European Regional Science Association.
    8. Juan Máñez & María Rochina-Barrachina & Amparo Sanchis-Llopis & Juan Sanchis-Llopis, 2015. "The determinants of R&D persistence in SMEs," Small Business Economics, Springer, vol. 44(3), pages 505-528, March.
    9. Ljiljana BOZIĆ & Valerija BOTRIĆ, 2017. "Innovation investment decisions: are post(transition) economies different from the rest of the EU?," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 8, pages 25-43, December.
    10. Rammer, Christian & Schubert, Torben, 2016. "Concentration on the few? R&D and innovation in German firms 2001 to 2013," ZEW Discussion Papers 16-005, ZEW - Leibniz Centre for European Economic Research.
    11. Rammer, Christian & Schubert, Torben, 2018. "Concentration on the few: mechanisms behind a falling share of innovative firms in Germany," Research Policy, Elsevier, vol. 47(2), pages 379-389.
    12. Christian Le Bas & Caroline Mothe & Thuc Uyen Nguyen-Thi, 2015. "The differentiated impacts of organizational innovation practices on technological innovation persistence," Post-Print hal-01301433, HAL.

    More about this item

    Keywords

    R&D; Innovation-strategy; productivity; export; dynamic panel-data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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