Firm Size and Innovation in the Service Sector

David Audretsch (), Marian Hafenstein, Alexander Kritikos and Alexander Schiersch
Additional contact information
David Audretsch: Indiana University
Marian Hafenstein: DIW Berlin

No 12035, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A rich literature links knowledge inputs with innovative outputs. However, most of what is known is restricted to manufacturing. This paper analyzes whether the three aspects involving innovative activity - R&D; innovative output; and productivity - hold for knowledge intensive services. Combining the models of Crepon et al. (1998) and of Ackerberg et al. (2015), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge intensive services benefit from innovation activities in the sense that these activities causally increase their labor productivity. Moreover, the firm size advantage found for manufacturing in previous studies nearly disappears for knowledge intensive services.

Keywords: innovation; service sector; R&D; MSMEs; productivity; entrepreneurship (search for similar items in EconPapers)
JEL-codes: L25 L60 L80 O31 O33 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2018-12
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published as 'Microfirms and innovation in the service sector' in: Small Business Economics, 2020, 55 (4), 997-1018

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Related works:
Working Paper: Firm Size and Innovation in the Service Sector (2019)
Working Paper: Firm Size and Innovation in the Service Sector (2018)
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