Innovation Complementarity and Scale of Production

29 Pages Posted: 8 May 2006

See all articles by Eugenio J. Miravete

Eugenio J. Miravete

University of Texas at Austin; Centre for Economic Policy Research (CEPR)

José C. Pernías

Jaume I University - Department of Economics

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Abstract

We present an econometrically feasible model that uses the information contained in the innovation profile of each firm to test for the existence of complementarity among production and innovation strategies. Our approach is able to distinguish between complementarity and correlation induced by unobserved heterogeneity. We apply the model to analyze the Spanish ceramic tile industry where the adoption of the single firing furnace in the 1980's facilitated the introduction of new product designs as well as opening new ways of organizing production. Our econometric results show that there is significant complementarity between product and process innovation. Small firms tend to be more innovative overall.

Suggested Citation

Miravete, Eugenio J. and Pernías, José C., Innovation Complementarity and Scale of Production. Journal of Industrial Economics, Vol. 54, No. 1, pp. 1-29, March 2006, Available at SSRN: https://ssrn.com/abstract=891506 or http://dx.doi.org/10.1111/j.1467-6451.2006.00273.x

Eugenio J. Miravete (Contact Author)

University of Texas at Austin ( email )

Department of Economics
1 University Station C3100
Austin, TX 78712-0301
United States
512-232-1718 (Phone)
512-471-3510 (Fax)

HOME PAGE: http://www.eco.utexas.edu/facstaff/Miravete

Centre for Economic Policy Research (CEPR)

London
United Kingdom

José C. Pernías

Jaume I University - Department of Economics ( email )

Campus del Riu Sec.
E-12071 Castellon
Spain
34 96 472 8610 (Phone)
34 96 472 8591 (Fax)

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