Succeeding in Innovation: Key Insights on the Role of R&D and Technological Acquisition Drawn from Company Data

24 Pages Posted: 26 Oct 2013

See all articles by Andrea Conte

Andrea Conte

University of Turin; Max Planck Society for the Advancement of the Sciences - Entrepreneurship, Growth and Public Policy Group

Marco Vivarelli

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

Abstract

This paper discusses the relationship between a company's investment in innovation and its success in introducing new product and/or process innovations. In doing so, this analysis departs from the standard approach which puts forward a homogenous R&D-based knowledge production function by introducing different types of innovation investments (R&D and technology acquisition) for different sets of companies.Using the Community Innovation Survey (CIS) dataset comprising more than 3000 Italian manufacturing companies, the econometric analysis adopts a set of techniques which allows to control for the sample selection, endogeneity and simultaneity problems which arise when dealing with CIS data.The main findings are summarised as follows: (1) beyond the acknowledged effect of R&D in increasing the probability of success of product innovation, a larger-than-expected role is played by technology acquisition in the innovation process; (2) the relative importance of R&D and technology acquisition varies significantly across different types of companies where crucial dimensions of analysis are company size and the technological domain of a sector.

Keywords: R&D, product innovation, process innovation, embodied technical change, sample selection, SUR, community innovation survey

JEL Classification: O31

Suggested Citation

Conte, Andrea and Vivarelli, Marco, Succeeding in Innovation: Key Insights on the Role of R&D and Technological Acquisition Drawn from Company Data. IZA Discussion Paper No. 7671. Available at SSRN: https://ssrn.com/abstract=2345588

Andrea Conte (Contact Author)

University of Turin ( email )

Via Po 53
10124 Torino, Turin - Piedmont 10100
Italy

Max Planck Society for the Advancement of the Sciences - Entrepreneurship, Growth and Public Policy Group

Kahlaische Strasse 10
D-07745 Jena, 07745
Germany

HOME PAGE: http://www.mpiew-jena.mpg.de/english/staff/egp/conte.html

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

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