The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe

33 Pages Posted: 12 Jun 2008

Date Written: May 2008

Abstract

This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7,302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types of innovation, including Internet-enabled and non-Internet-enabled product or process innovations, are positively associated with turnover and employment growth. Firms that rely on Internet-enabled innovations are at least as likely to grow as firms that rely on non-Internet-enabled innovations. Finally, it was found that innovative activity is not necessarily associated with higher profitability. Possible reasons for this and implications are discussed.

Keywords: information technology, e-business, innovation, firm performance, profitability

JEL Classification: M13, O32, M

Suggested Citation

Koellinger, Philipp, The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence on E-Business in Europe (May 2008). ERIM Report Series Reference No. ERS-2008-031-ORG. Available at SSRN: https://ssrn.com/abstract=1144294

Philipp Koellinger (Contact Author)

Vrije Universiteit Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

HOME PAGE: http://www.philipp-koellinger.com

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