R&D, Firm Size, and Product Innovation Dynamics

Marco Corsino, Giuseppe Espa () and Rocco Micciolo ()

No 45, ROCK Working Papers from Department of Computer and Management Sciences, University of Trento, Italy

Abstract: This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and sirm size on innovation output. It further explores how structural characteristics of the sirm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled sirms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.

New Economics Papers: this item is included in nep-ifn, nep-ipr and nep-knm
Date: 2008-05, Revised 2008-06-12
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Working Paper: R&D, firm size, and product innovation dynamics (2008)
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