2016/31 | LEM Working Paper Series | |
Persistence of innovation and patterns of firm growth |
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Dario Guarascio and Federico Tamagni |
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Keywords | ||
firm growth, innovation persistence, product and process innovation, R&D, patents, quantile regressions
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JEL Classifications | ||
D22, O30, C21
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Abstract | ||
It is often argued that persistent innovators are in a better position
to outperform competitors, due to superior ability to sustain
comparative advantages over time. In this work we exploit a
long-in-time panel of Spanish manufacturing firms over the period 1990-
2012 to examine the long-run contribution of innovation persistence to
sales market shares growth and dynamics. We examine two main research
questions. First, do persistent innovators grow more than other firms?
Second, do persistent innovators show more persistence than other firms
in their growth patterns over time? We find a negative answer to both
questions: firms that persistently innovate over the first decade, do not
grow more and do not display more persistent market share dynamics
over the following years. The results are robust across different
definitions of persistent innovators, according to persistence in R&D,
product or process innovation, and patenting behaviour.
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