BIG Data – BIG Gains? Empirical Evidence on the Link Between Big Data Analytics and Innovation

38 Pages Posted: 29 Nov 2017

See all articles by Thomas Niebel

Thomas Niebel

ZEW – Leibniz Centre for European Economic Research

Fabienne Rasel

ZEW – Leibniz Centre for European Economic Research - Information and Communication Technologies Research Group

Steffen Viete

German Council of Economic Experts

Date Written: 2017

Abstract

This paper analyzes the relationship between firms’ use of big data analytics and their innovative performance in terms of product innovations. Since big data technologies provide new data information practices, they create novel decision-making possibilities, which are widely believed to support firms’ innovation process. Applying German firm-level data within a knowledge production function framework we find suggestive evidence that big data analytics is a relevant determinant for the likelihood of a firm becoming a product innovator as well as for the market success of product innovations. These results hold for the manufacturing as well as for the service sector but are contingent on firms’ investment in IT-specific skills. Subsequent analyses suggest that firms in the manufacturing and service sector rely on different data sources and data-related firm practices in order to reap the benefits of big data. Overall, the results support the view that big data analytics have the potential to enable innovation.

Keywords: Big data, data-driven decision-making, product innovation, firm-level data

JEL Classification: D22, L20, O33

Suggested Citation

Niebel, Thomas and Rasel, Fabienne and Viete, Steffen, BIG Data – BIG Gains? Empirical Evidence on the Link Between Big Data Analytics and Innovation (2017). ZEW - Centre for European Economic Research Discussion Paper No. 17-053, Available at SSRN: https://ssrn.com/abstract=3078590 or http://dx.doi.org/10.2139/ssrn.3078590

Thomas Niebel (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Fabienne Rasel

ZEW – Leibniz Centre for European Economic Research - Information and Communication Technologies Research Group ( email )

D-68034 Mannheim
Germany

Steffen Viete

German Council of Economic Experts ( email )

Federal Statistical Office
Gustav-Stresemann-Ring 11
Wiesbaden, Hessen 65180
Germany

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