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Examining Biases in Measures of Firm Innovation

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  • Paul H. Jensen

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Elizabeth Webster

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

A challenge for applied studies of innovation is to find quality-adjusted and unbiased measures for the extent and type of innovative activity in firms. This paper considers, in the light of the uses for these measures, how well we expect these common indicators quantify innovative services and how well they actually correlate using data from a sample of 641 companies. The results suggest that while the correlations between indicators are positive, they are quite small. In addition, our findings show that compared with survey measures, the accounting and administrative measures have different biases with respect to firm size, industry sector and innovation type. This should be born in mind when using these measures to depict trends in innovative activity and reveal relationships between firm activities.

Suggested Citation

  • Paul H. Jensen & Elizabeth Webster, 2004. "Examining Biases in Measures of Firm Innovation," Melbourne Institute Working Paper Series wp2004n10, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    • Handle: RePEc:iae:iaewps:wp2004n10
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    References listed on IDEAS

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    Cited by:

    1. Gurkov, Igor, 2013. "Why some Russian industrial companies innovate regularly: Determinants of firms’ decisions to innovate and associated routines," Journal of East European Management Studies, Nomos Verlagsgesellschaft mbH & Co. KG, vol. 18(1), pages 66-96.
    2. Nicolas van Zeebroeck, 2011. "The puzzle of patent value indicators," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 20(1), pages 33-62.
    3. Paul H. Jensen & Elizabeth Webster, 2006. "Firm Size and the Use of Intellectual Property Rights," The Economic Record, The Economic Society of Australia, vol. 82(256), pages 44-55, March.
    4. Nicolas van Zeebroeck, 2007. "Patents only live twice: a patent survival analysis in Europe," Working Papers CEB 07-028.RS, ULB -- Universite Libre de Bruxelles.
    5. William Griffiths & Elizabeth Webster, 2004. "The determinants of research and development and intellectual property usage among Australian Companies, 1989 to 2002," Centre for International Economic Studies Working Papers 2004-15, University of Adelaide, Centre for International Economic Studies.
    6. Ucbasaran, Deniz & Westhead, Paul & Wright, Mike, 2009. "The extent and nature of opportunity identification by experienced entrepreneurs," Journal of Business Venturing, Elsevier, vol. 24(2), pages 99-115, March.
    7. Boly, Vincent & Morel, Laure & Assielou, N’Doli Guillaume & Camargo, Mauricio, 2014. "Evaluating innovative processes in french firms: Methodological proposition for firm innovation capacity evaluation," Research Policy, Elsevier, vol. 43(3), pages 608-622.
    8. Peneder, Michael & Rammer, Christian (ed.), 2018. "Measuring Competitiveness," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 181906, March.
    9. Paul H. Jensen & Elizabeth Webster, 2004. "SMEs and Their Use of Intellectual Property Rights in Australia," Melbourne Institute Working Paper Series wp2004n17, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    10. Syeda Tamkeen Fatima, 2017. "Globalization and technology adoption: evidence from emerging economies," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 26(6), pages 724-758, August.
    11. Michael Peneder & Christian Rammer, 2018. "Measuring Competitiveness," WIFO Studies, WIFO, number 60838, January.
    12. Sam Tavassoli, 2011. "A Comparative Investigation of Firms' Innovative behaviors During Different Stages of the Cluster Life-Cycle (Cover study for PhD dissertation)," ERSA conference papers ersa10p1045, European Regional Science Association.
    13. Godinho, Manuel Mira & Ferreira, Vítor, 2012. "Analyzing the evidence of an IPR take-off in China and India," Research Policy, Elsevier, vol. 41(3), pages 499-511.

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