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

Alex Coad () and Rekha Rao ()

LEM Papers Series from Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy

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 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent, nep-ino and nep-tid
Date: 2006-08-23
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Related works:
Working Paper: Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach (2007)
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:ssa:lemwps:2006/18

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