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Innovation and firm growth: Does firm age play a role?

Alex Coad, Segarra Blasco, Agustí, 1958- and Mercedes Teruel

Working Papers from Universitat Rovira i Virgili, Department of Economics

Abstract: This paper explores the relationship between firm growth, innovation and firm age. We hypothesize that young firms undertake riskier innovation activities and are more oriented towards employment growth than towards harvesting returns in the form of sales growth. Using an extensive sample of Community Innovation Survey for the period 2004-2010, we apply quantile regressions and a Heckman sample selection technique to study the impact of R&D activities on firm growth according to firm age. Our results show that R&D intensity is positively associated with firm growth. However, for young firms R&D shows an increasing influence across the quantiles, while for old firms R&D shows a stable or perhaps decreasing effect over the quantiles. Firm age shows a significant negative impact among young firms, while for the sample of old firms the impact of firm age becomes non-significant. Our Heckman estimations show the evolution of the impact of the R&D on firm growth confirming a significant impact on sales and productivity growth, while the impact is negligible for employment growth. Keywords: firm age, firm growth, innovation, quantile regression. JEL CODES: L25, L20

Keywords: Empreses -- Creixement; Organització industrial; Innovacions tecnològiques; 33 - Economia (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-ino, nep-knm, nep-sbm and nep-tid
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Journal Article: Innovation and firm growth: Does firm age play a role? (2016) Downloads
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