2008/02 LEM Working Paper Series


Product Innovation and Growth: The Case of Integrated Circuits

Marco Corsino
  Keywords
 
Firm Growth; Product Innovation; Semiconductor industry


  JEL Classifications
 


  Abstract
 
A puzzling evidence stemming from the applied research on growth and innovation is that successful innovations do not appear to have a significant effect on sales growth rates, at odds with the expectation that successful innovators will prosper at the expenses of their less able competitors. The present paper tests a research hypothesis claiming that the level of observation at which applied research is typically conducted hampers the identification of a significant association between innovation and sales growth rates. Exploiting a unique and original database comprising detailed information on product innovations by leading semiconductor companies, we find components commercialized in the nearest past to positively affect the stream of corporate revenues.


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