Is Demand-Pulled Innovation Equally Important in Different Groups of Firms?

Posted: 16 Jun 2008

See all articles by Mariacristina Piva

Mariacristina Piva

Universita Cattolica del Sacro Cuore

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano; IZA Institute of Labor Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2007

Abstract

Previous empirical literature has tested the demand-pull hypothesis and found that innovation may be driven by output. Using a balanced panel of 216 Italian manufacturing firms (1995-2000) and checking for the path-dependent nature of R&D we find a role of sales in inducing R&D. However, the demand-pull effect plays a varying role for different sub-samples of firms. Exporting firms, liquidity-constrained firms, unsubsidised firms and those not heading a group seem to be sensitive to sales in deciding R&D. These results have been obtained using a Least Squares Dummy Variable Corrected Estimator, a recent panel-data technique suitable for small samples.

Keywords: R&D expenditures, Demand-pull, Innovative firms, LSDVC estimator

JEL Classification: O31, L22

Suggested Citation

Piva, Mariacristina and Vivarelli, Marco, Is Demand-Pulled Innovation Equally Important in Different Groups of Firms? (September 2007). Cambridge Journal of Economics, Vol. 31, Issue 5, pp. 691-710, 2007. Available at SSRN: https://ssrn.com/abstract=1146014 or http://dx.doi.org/10.1093/cje/bem010

Mariacristina Piva (Contact Author)

Universita Cattolica del Sacro Cuore ( email )

Via Emilia Parmense, 84
Piacenza
Italy

Marco Vivarelli

Universita Cattolica del Sacro Cuore, Milano ( email )

Largo Gemelli 1
Milano, 20123
Italy

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Register to save articles to
your library

Register

Paper statistics

Abstract Views
396
PlumX Metrics