Innovation and Firm Performance

The term innovation generally means ‘something new’ – and this monograph is an innovation in a sense that it provides the reader with some new insights into the consequences of innovation activities at the ?rm level. The process of firms’ growth – in terms of productivity or employment – is a major concern of policy makers. In this context, innovations are considered to play a crucial role in stimulating firms’ performance. This book investigates this general hypothesis by looking at three topics: 1. Does innovation lead to an increase in employment growth? 2. Does innovation boost labour productivity? 3. Does innovation in one period improve innovation performance in subsequent periods? Based on a comprehensive innovation panel dataset for German firms, this book presents detailed results for each question, in particular by separating the effects induced by new products from those induced by the introduction of new production technologies. From a theoretical point of view, amongst others, a new multi-product model has been developed to study employment effects. The term innovation generally means ‘something new’ – and this monograph is an innovation in a sense that it provides the reader with some new insights into the consequences of innovation activities at the ?rm level. In recent years, the importance of innovations for improving competitiveness and stimulating economic growth has increasingly become the focus of public attention. The Federal Government, for instance, proclaimed 2004 as the ‘year of innovation’ and started several initiatives to foster innovation activities in Germany. This monograph is aimed at the empirical assessment of the impact of the int- duction of new products and processes on various ?rm performance measures using modern microeconometric techniques. This book represents the written part of my doctoral examinations at the Department of Economics at the University of Wur ¨ zburg which were c- cluded with the oral examinations on July 28, 2006. The completion of this thesis was only possible with the assistance and the promotion of numerous individuals and institutions. First of all, I want to express my gratitude to my supervisor Martin Kukuk for supporting my academic research. During all the time he put his trust in me and gave me su?cient freedom to realise my ideas. I would like to thank him and Prof. Dr. Norbert Schulz, who kindly accepted to take on the second report, for their critical comments and constructive suggestions.

The emergence of firm level data such as the European Community Innovation Survey (CIS), has led to a surge of studies on innovation and firm behaviour. Written by an international group of contributors, the studies in this book document progress in four inter-related fields. The emergence of new firm-level data, including the European Community Innovation Survey (CIS), has led to a surge of studies on innovation and firm behaviour. This book documents progress in four interrelated fields: · investigation of the use of new indicators of innovation output · investigation of determinants of innovative behaviour · the role of spillovers, the public knowledge infrastructure and research and development collaboration · The impact of innovation on firm performance Written by an international group of contributors, the studies are based on agriculture and the manufacturing and service industries in Europe and Canada and provide new insights into the driving forces behind innovation.