Productivity effects of innovation modes

Polder, Michael and Leeuwen, George van and Mohnen, Pierre and Raymond, Wladimir (2009): Productivity effects of innovation modes.

Abstract

Many empirical studies have confirmed the positive impact of innovation on productivity at the firm level. The focus tends to be either on R&D driven techno-logical innovation on the one hand, or on organisational changes complemented by ICT on the other. To investigate the effect of different types of innovations on produc-tivity, we propose a model with two innovation input equations (R&D and ICT) that feed into a knowledge production function consisting of a system of three innovation output equations (product innovation, process innovation and organisational innova-tion), which ultimately feeds into a productivity equation. We find that ICT is an im-portant driver of innovation in both manufacturing and services. Doing more R&D has a positive effect on product innovation in manufacturing. Organisational innova-tion has the strongest productivity effects. We only find positive effects of product and process innovation when combined with an organisational innovation.

• Item Type: MPRA Paper
• Language: English
• Keywords: technological innovation; non-technological innovation; ICT; R&D; productivity; trivariate probit; CDM model
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O30 - General; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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