Innovation and Economic Performance in Services: A Firm-Level Analysis

Posted: 29 Feb 2008

See all articles by Giulio Cainelli

Giulio Cainelli

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee; CERIS-CNR

Maria Savona

University of Sussex

Rinaldo Evangelista

University of Camerino

Abstract

This paper explores the two-way relationship between innovation and economic performance in services using a longitudinal firm-level dataset which matches data from the second Community Innovation Survey, CIS II (1993-95), against a set of economic variables provided by the System of Enterprise Accounts (1993-98). The results presented show that innovation is positively affected by past economic performance and that innovation activities (especially investments in ICTs) have a positive impact on both growth and productivity. Furthermore, productivity and innovation act as a self-reinforcing mechanism, which further boosts economic performance. These findings provide empirical support for the endogenous nature of innovation in services and the presence in this sector of competition models and selection mechanisms based on innovation.

Keywords: Technological innovation, Economic performance, Service sector

Suggested Citation

Cainelli, Giulio and Savona, Maria and Evangelista, Rinaldo, Innovation and Economic Performance in Services: A Firm-Level Analysis. Cambridge Journal of Economics, Vol. 30, Issue 3, pp. 435-458, 2006. Available at SSRN: https://ssrn.com/abstract=904508

Giulio Cainelli (Contact Author)

Università degli Studi di Bari - Dipartimento per lo Studio delle Societa Mediterranee ( email )

Piazza Umberto I
70124 Bari, 70121
Italy

CERIS-CNR ( email )

Via Avogadro 8
10121 Torino
Italy

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

Rinaldo Evangelista

University of Camerino ( email )

Via M. Delle Carceri
Camerino, Macerata 62032
Italy

Register to save articles to
your library

Register

Paper statistics

Abstract Views
846
PlumX Metrics