R&D Drivers in Young Innovative Companies

Jose Garcia-Quevedo, Gabriele Pellegrino and Marco Vivarelli ()

No 6136, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper examines the determinants of young innovative companies' (YICs) R&D activities taking into account the autoregressive nature of innovation. Using a large longitudinal dataset comprising Spanish manufacturing firms over the period 1990-2008, we find that previous R&D experience is a fundamental determinant for mature and young firms, albeit to a smaller extent in the case of the YICs, suggesting that their innovation behaviour is less persistent and more erratic. Moreover, our results suggest that firm and market characteristics play a distinct role in boosting the innovation activity of firms of different age. In particular, while market concentration and the degree of product diversification are found to be important in fostering R&D activities in the sub-sample of mature firms only, YICs' spending on R&D appears to be more sensitive to demand-pull variables, suggesting the presence of credit constraints. These results have been obtained using a recently proposed dynamic type-2 tobit estimator, which accounts for individual effects and efficiently handles the initial conditions problem.

Keywords: dynamic type-2 tobit estimator; innovation; R&D; Young Innovative Companies (YICs) (search for similar items in EconPapers)
JEL-codes: O31 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2011-11
New Economics Papers: this item is included in nep-cse, nep-ent, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - published as 'R&D drivers and age: Are young firms different?' in: Research Policy, 2014, 43 (9), 1544-1556

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