Innovation Complimentarity and Scale of Production

Eugenio Miravete () and Pernías, Jose C

No 4483, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper is an empirical study on the existence of complementarity between product and process innovation. We present an econometrically feasible model that uses the information contained in the innovation profile of each firm to test for the existence of complementarity among production and innovation strategies. We apply the model to analyse the Spanish ceramic tiles industry where the adoption of the single firing furnace in the 1980s facilitated the introduction of new product designs as well as to opening new ways of organizing production. Our econometric results show that there is significant complementarity between product and process innovation. We are able to separate the nature of complementarity relationships and thus, our results show that both intrinsic ? technologically driven ? and induced complementarity ? due to firms unobserved heterogeneity ? are significant. Small firms tend to be more innovative overall.

Keywords: Complementarity; Supermodularity; Unobserved heterogeneity; Product innovation; Process innovation (search for similar items in EconPapers)
JEL-codes: C52 L20 O32 (search for similar items in EconPapers)
Date: 2004-07
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://cepr.org/publications/DP4483 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: INNOVATION COMPLEMENTARITY AND SCALE OF PRODUCTION* (2006)
Working Paper: Innovation Complementarity and Scale of Production (1998)
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:cpr:ceprdp:4483

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4483

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().