Innovation and Sales Growth Among Heterogeneous Albanian Firms: A Quantile Approach

Blendi Gerdoçi () and Sidita Dibra ()
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Blendi Gerdoçi: Faculty of Economy, University of Tirana
Sidita Dibra: Faculty of Economy, University of Tirana

A chapter in Advances in Longitudinal Data Methods in Applied Economic Research, 2021, pp 147-156 from Springer

Abstract: Abstract This study contributes to the stream of research that critically questions the relationship between innovation and firm’s growth performance. Using the 2019 World Bank Group enterprise survey data, Ordinary least square (OLS) and Quantile regression (QR) have been employed to examine the effect of various measures of innovation on the sales growth of Albanian firms. The two-regression analysis offer inconsistent results. OLS study results show that the adoption by firms of new processes is the only innovation measure that positively affects sales growth. Controversially, the more nuanced QR results show that the impact of innovation on sales growth is significant only for those firms located at the 90th percentiles. Product innovation and internal R&D appear to be the drivers of high-growth firms’ performance. Surprisingly, process innovation and external R&D have a negative impact on the growth performance of such firms. For the rest of the quantiles, the results show that innovation does not affect sales growth. Our study results show that innovation explanatory power is weak and noteworthy only for high-growth firms.

Keywords: Innovation; Firm growth; Quantile regression; Albania; Transition countries (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-63970-9_11

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DOI: 10.1007/978-3-030-63970-9_11

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