One or Many Knowledge Production Functions? Mapping Innovative Activity Using Microdata

26 Pages Posted: 14 Dec 2005

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

Date Written: December 2005

Abstract

This paper discusses the determinants of three alternative measures of innovative output by looking at firm's own formal R&D activities and at the acquisition of external technology (TA) in its embodied and disembodied components. These input-output relationships are also discussed by distinguishing between small and large firms and those belonging to low-tech and high-tech sectors. The empirical analysis focuses on the Italian industrial sector over the period 1998-2000, using a subsample of 2,949 firms from the third European Community Innovation Survey (CIS 3). A bivariate probit analysis framework is used to investigate the determinants of product and process innovations, while truncated regressions are used to discuss innovation intensity. This paper also discusses an alternative test procedure that permits an extension of Cragg's test in the analysis of survey data with weighted observations. Results show that R&D is strictly linked to product innovation, while TA is crucial in fostering process innovation; however, both inputs increase a firm's innovative intensity. Significant evidence is also found that small firms and firms belonging to low-tech sectors rely more on the acquisition of external technologies and on cooperation agreements, while larger firms in high-tech sectors rely more on their own formal R&D.

Keywords: R&D, product and process innovation, embodied technical change, CIS 3, bivariate probit, Cragg's test

JEL Classification: O31

Suggested Citation

Conte, Andrea and Vivarelli, Marco, One or Many Knowledge Production Functions? Mapping Innovative Activity Using Microdata (December 2005). IZA Discussion Paper No. 1878. Available at SSRN: https://ssrn.com/abstract=870284

Andrea Conte

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 (Contact Author)

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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