Barriers to Innovation: Can Firm Age Help Lower Them?
43 Pages Posted: 8 Mar 2016
Date Written: November 22, 2015
This paper examines how firm age can affect a firm’s perception of the obstacles (deterring vs. revealed) that hamper and delay innovation. Using a comprehensive panel of Spanish firms for the period 2004-2011, the empirical analysis conducted shows that distinct types of obstacle are perceived differently by firms of different ages. First, a clear-cut negative relationship is identified between firm age and a firm’s assessment of both the internal and external shortages of financial resources. Second, young firms seem to be less sensitive to the lack of qualified personnel when initiating an innovative project than when they are already engaged in such activities. By contrast, the attempts of mature firms to engage in innovation activity are significantly affected by the lack of qualified personnel. Finally, mature incumbents appear to attach greater importance to obstacles related to market structure and demand than is the case of firms with less experience.
Keywords: Barriers to innovation, firm age, probit panel data model
JEL Classification: C23, O31, O32, O33
Suggested Citation: Suggested Citation