DOES PRODUCT INNOVATION AND FIRM GROWTH GO HAND IN HAND?

Abstract

This chapter investigates the relationship between product innovation and firm performance. We apply a logistic regression to predict product innovation using a number of explanatory variables of which firm growth is of principal interest. We study the relationship at two different time periods using two comparable questionnaire surveys. These are combined with accounting statistics and labor market data. We find that firms which are experiencing high growth rates also are more likely to have been product innovating. We also find support for the user-producer theorem and that Schumpeter may have been right in his hypotheses concerning firm size and innovative activities.

Citation

Reichstein, T. (2004), "DOES PRODUCT INNOVATION AND FIRM GROWTH GO HAND IN HAND?", Christensen, J.L. and Lundvall, B.-A. (Ed.) Product Inovation, Interactive Learning and Economic Performance (Research on Technological Innovation, Management and Policy, Vol. 8), Emerald Group Publishing Limited, Leeds, pp. 343-361. https://doi.org/10.1016/S0737-1071(04)08014-X