Innovation and Survival of Young French Firms

David Dadakpete and Moïse Dossa

MPRA Paper from University Library of Munich, Germany

Abstract: Often described as a powerful strategy in inter-firm competition, innovation remains a timeless topic in economics. Although a large body of empirical literature finds evidence for an “innovation premium” (Cefis and Marsili, 2005) associated with better survival prospects for firms, numerous studies highlight the inherent risks associated with innovation activity, which could shorten a firm’s market longevity ("liability of innovativeness"(Deng et al., 2014)). This paper investigates whether the “innovation premium” or “liability of innovativeness” prevails among young French firms during their first five years. According to our estimates, the two effects seem to offset each other in most cases. Indeed, for three (process, product, organization) of the four types of innovation considered, no significant effect on firm survival is observed. However, for marketing innovation, the “liability of innovativeness” appears to prevail. Our estimates suggest that firms introducing marketing innovation upon market entry face an 11.3% higher risk of closure.

Keywords: Innovation; Firm survival; Duration models (search for similar items in EconPapers)
JEL-codes: L25 L26 O3 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/127936/1/MPRA_paper_127936.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:127936

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().