Template-Type: ReDIF-Paper 1.0
Author-Name: Eleonora Bartoloni
Author-X-Name-First: Eleonora
Author-X-Name-Last: Bartoloni
Author-Email: bartolon@istat.it
Author-Workplace-Name: ISTAT, Istituto Nazionale di Statistica
Author-Name: Maurizio Baussola
Author-X-Name-First: Maurizio
Author-X-Name-Last: Baussola
Author-Email: maurizio.baussola@unicatt.it
Author-Workplace-Name: DISCE, Universitā Cattolica
Title: Persistent Product Innovation and Market-oriented Behaviour: the Impact on Firms' Performance
Abstract: This paper provides an empirical investigation of the impact of innovation on firms' economic performance pinpointing complementarities between product and marketing innovation during the period 1998-2008. Firms' profitability and productivity are simultaneously estimated, thus allowing for consistent and robust estimates of the relationship being tested. The conceptual framework in which we have developed the analysis bridges the gap between the management (organization) approach, from which we grasp the notion of a firm's market orientation to innovation, and the economics of innovation perspective. The results show that being a persistent product-innovating and market- oriented firm significantly affects profitability, although the estimated impact is relatively mild. The gain in productivity determined by investing in R&D is relatively small and in line with the corresponding gain attributable to investing in marketing and organizational innovations. Conversely, capital deepeningŅas measured by the capital-labor ratio-exerts a larger impact on productivity, thus underlining how knowledge capital plays a less relevant role. This result emphasizes a crucial weakness of Italian manufacturing firms, because knowledge in- vestment is the key to future economic growth. The estimates we have presented cover a sufficiently long time interval, thus enabling us to perform different robustness tests.
Length: 47 pages
Creation-Date: 2015-03
Publication-Status: 
File-URL: http://dipartimenti.unicatt.it/dises-wp_15_105.pdf
File-Format: Application/pdf
File-Function: First version, 2015
Number: dises1505
Classification-JEL: L25, O30, O32, O33
Keywords: Product Innovation, Market Orientation, European Community Innovation Survey, Profitability, Productivity
Handle: RePEc:ctc:serie2:dises1505