Don't Stop Me Now: Barriers to Innovation and Firm Productivity.

22 Pages Posted: 7 Mar 2016

See all articles by Alex Coad

Alex Coad

CENTRUM Catolica Graduate Business School

Gabriele Pellegrino

Ecole Polytechnique Fédérale de Lausanne

Maria Savona

University of Sussex

Date Written: April 7, 2014

Abstract

This paper analyses the effect of financial, knowledge, demand, market structure and regulation barriers to innovation on firms’ economic performance. It contributes to the literature on barriers to innovation in a two-fold way. First, it disentangles the mediated effect of obstacles, via product, process and organisational innovation, on labour productivity. Second, it accounts for the differentiated effect that each of the barriers has on firms positioned along the productivity distribution. We do so by employing both quantile regression techniques and propensity score matching on the UK CIS panel 2002-2010 merged with the Business Structure database. While we find evidence that financial obstacles negatively affect productivity across the distribution, and are more pronounced for young rather than small firms, knowledge and regulatory obstacles mostly affect high productivity firms. Interestingly, the perceptions of market structure and demand obstacles are positively associated to productivity performance, confirming their “revealed” rather than “deterring” nature.

Suggested Citation

Coad, Alex and Pellegrino, Gabriele and Savona, Maria, Don't Stop Me Now: Barriers to Innovation and Firm Productivity. (April 7, 2014). SWPS 2014-04. Available at SSRN: https://ssrn.com/abstract=2742111 or http://dx.doi.org/10.2139/ssrn.2742111

Alex Coad (Contact Author)

CENTRUM Catolica Graduate Business School ( email )

1801 Universitaria Avenue
San Miguel
Lima, Lima Lima32
Peru

Gabriele Pellegrino

Ecole Polytechnique Fédérale de Lausanne ( email )

Station 5
Odyssea 1.04
1015 Lausanne, CH-1015
Switzerland

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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