Persistence of Innovation Stylised Facts and Panel Data Evidence

Bettina Peters ()

No 06-30, DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies

Abstract: This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994–2002. It turns out that innovation behaviour is permanent at the firm–level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), I further shed some light on the driving forces for this phenomenon. The econometric results show that past innovation experience is an important determinant for manufacturing as well as for service sector firms, and hence confirm the hypothesis of true state dependence. In addition, the results highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation.

Keywords: Innovation; persistence; state dependence; unobserved heterogeneity; dynamic random effects panel probit model (search for similar items in EconPapers)
JEL-codes: C23 C25 L20 O31 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-dcm, nep-ino, nep-mic and nep-tid
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
https://wp.druid.dk/wp/20060030.pdf (application/pdf)

Related works:
Journal Article: Persistence of innovation: stylised facts and panel data evidence (2009)
Working Paper: Persistence of Innovation: Stylised Facts and Panel Data Evidence (2005)
Working Paper: Persistence of Innovation: Stylised Facts and Panel Data Evidence (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aal:abbswp:06-30

Access Statistics for this paper

More papers in DRUID Working Papers from DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies
Bibliographic data for series maintained by Keld Laursen ().