Productivity, Innovation Creation and Absorption, and R&D: Micro Evidence for Italy

Boston College Working Papers in Economics No. 526

35 Pages Posted: 25 Mar 2002

See all articles by Maria Laura Parisi

Maria Laura Parisi

University of Brescia, Department of Economics and Management

Fabio Schiantarelli

Boston College - Department of Economics; IZA Institute of Labor Economics

Alessandro Sembenelli

University of Turin - Department of Economics and Financial Sciences G. Prato

Date Written: February 14, 2002

Abstract

By exploiting a rich firm level data-base, this paper presents novel empirical evidence on the effect of process and product innovations on productivity, as well as on the role played by R&D and fixed capital investment in enhancing the likelihood of introducing innovations at the firm level. Our results imply that process innovation has a large impact on productivity. Furthermore, R&D spending is strongly positively associated with the probability of introducing a new product, whereas fixed capital spending increases the likelihood of introducing a process innovation. The latter result reflects the fact that new technologies are frequently embodied in new capital goods. However, the effect of fixed investment on the probability of introducing a process innovation is magnified by R&D spending internal to the firm. This implies that R&D affects productivity growth by facilitating the absorption of new technologies.

Keywords: Productivity, Innovation, Absorption, R&D

JEL Classification: D24, O31, O32, O33

Suggested Citation

Parisi, Maria Laura and Schiantarelli, Fabio and Sembenelli, Alessandro, Productivity, Innovation Creation and Absorption, and R&D: Micro Evidence for Italy (February 14, 2002). Boston College Working Papers in Economics No. 526, Available at SSRN: https://ssrn.com/abstract=302368 or http://dx.doi.org/10.2139/ssrn.302368

Maria Laura Parisi

University of Brescia, Department of Economics and Management ( email )

via San Faustino 74/b
Brescia, 25122
Italy
+39 0302988826 (Phone)
+39 0302988837 (Fax)

Fabio Schiantarelli (Contact Author)

Boston College - Department of Economics ( email )

140 Commonwealth Avenue
Chestnut Hill, MA 02467
United States
617-552-4512 (Phone)
617-552-2308 (Fax)

HOME PAGE: http://https://sites.google.com/a/bc.edu/fabio-schiantarelli/

IZA Institute of Labor Economics

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

Alessandro Sembenelli

University of Turin - Department of Economics and Financial Sciences G. Prato ( email )

C. so Unione Sovietica, 218 Bis
Torino, 13820-4020
Italy
+39 011 670 6059 (Phone)
+39 011 670 6062 (Fax)

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