Productivity growth and business model innovation

Wit Wannakrairoj and Chander Velu

Economics Letters, 2021, vol. 199, issue C

Abstract: Organizational factors have been identified as a possible explanation for total factor productivity and hence the Solow paradox. We posit that business model innovation is a major organizational factor. However, there has not been any systematic study on how business model innovation affects productivity growth rates. We introduce a novel approach of measuring business model innovation using change in the net asset turnover ratio. The study shows that business model innovation contributes significantly to productivity growth across firms in the UK between 2003 and 2017. The study provides empirical support that business model innovation could partially explain the Solow productivity paradox.

Keywords: Business model innovation; Productivity paradox; Firm productivity and production function (search for similar items in EconPapers)
JEL-codes: D22 D24 M21 O33 O47 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:199:y:2021:i:c:s0165176520304390

DOI: 10.1016/j.econlet.2020.109679

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