Innovation and firm growth in "complex technology" sectors: a quantile regression approach

Alex Coad () and Rekha Rao ()

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: Innovation is commonly seeb as the principal engine of economic development. In this paper, we investigate the microfoundations of economic growth by relating innovation to sales growth at the firm-level, for incumbent firms in four "complex technology" sectors. The average firm, which experiences only modest growth, may grow for a number of reasons that may not be related to "innovativeness". However, given that firms are heterogeneous and that growth rates distributions are typically heavy-tailed, it may be misleading to use regression techniques that focus on the average firm. Using a quantile regression approach, we observe that innovativeness is of crucial importance for a handful of "superstar" fast-growth firms.

Keywords: Innovation; firm growth; quantile regression. (search for similar items in EconPapers)
JEL-codes: O31 L25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-ent and nep-ino
Date: 2006-06
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Related works:
Working Paper: Innovation and firm growth in "complex technology" sectors: a quantile regression approach (2006)
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Persistent link: http://EconPapers.repec.org/RePEc:mse:wpsorb:r06050

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