Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach

Alex Coad () and Rekha Rao ()

No 57, Open Discussion Papers in Economics from The Open University, Faculty of Social Sciences, Department of Economics

Abstract: We relate innovation to sales growth for incumbent firms in four high-tech sectors. A firm, on average, experiences only modest growth and may grow for a number of reasons that may or may not be related to 'innovativeness'. However, given that firms are heterogeneous and that growth rates distributions are 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. We also discuss policy implications of our results.

Keywords: Innovation; Firm Growth; Quantile Regression; Innovation Policy; Patents (search for similar items in EconPapers)
JEL-codes: O31 L25 (search for similar items in EconPapers)
Date: 2007-01
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Related works:
Working Paper: Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach (2006)
Journal Article: Innovation and firm growth in high-tech sectors: A quantile regression approach (2008)
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Persistent link: http://EconPapers.repec.org/RePEc:opn:wpaper:57

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