Persistence of Innovation: Stylised Facts and Panel Data Evidence

Bettina Peters ()

Development and Comp Systems from University Library of Munich, Germany

Abstract: This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994-2002. We find that innovation behaviour is permanent at the firm-level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), we further shed some light on the driving forces for this phenomenon. The econometric results confirm the hypothesis of true state dependence for manufacturing as well as for service sector firms. In addition to past innovation experience, the results further highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation.

Keywords: innovation; persistence; state dependence; unobserved heterogeneity; dynamic random effects panel probit model (search for similar items in EconPapers)
JEL-codes: C23 C25 L20 O31 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2005-11-21
New Economics Papers: this item is included in nep-ent, nep-ino and nep-tid
Note: Type of Document - pdf; pages: 50
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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https://econwpa.ub.uni-muenchen.de/econ-wp/dev/papers/0511/0511021.pdf (application/pdf)

Related works:
Journal Article: Persistence of innovation: stylised facts and panel data evidence (2009)
Working Paper: Persistence of Innovation Stylised Facts and Panel Data Evidence (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpdc:0511021

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