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.

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ABSTRACT:Our empirical literature review shows that little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. For Spanish manufacturing firms, we analyse the firm performance related to firm age between 1998 and 2006. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity.

This paper examines the determinants of eco‐innovation strategy in Spanish manufacturing firms. Using panel data of 3,201 Spanish firms for the period 2008–14, we specify a dynamic random probit model controlling for sample selection. The empirical results confirm that public regulations and R&D efforts encourage firms to place eco‐innovation activities among their strategic priorities, although subsidies are not found to be a distinctive driver. Furthermore, we find that eco‐innovation is highly persistent at the firm level, past eco‐innovation behavior being clearly of key importance in explaining the current state of a firm's eco‐innovation orientation. In contrast, market factors are not found to be a key driver for eco‐innovative firms.

This paper examines the extent to which innovative Spanish firms pursue improvements in energy efficiency (EE) as an objective of innovation. The increase in energy consumption and its impact on greenhouse gas emissions justifies the greater attention being paid to energy efficiency and especially to industrial EE. The ability of manufacturing companies to innovate and improve their EE has a substantial influence on attaining objectives regarding climate change mitigation. Despite the effort to design more efficient energy policies, the EE determinants in manufacturing firms have been little studied in the empirical literature. From an exhaustive sample of Spanish manufacturing firms and using a logit model, we examine the energy efficiency determinants for those firms that have innovated. To carry out the econometric analysis, we use panel data from the Community Innovation Survey for the period 2008-2011. Our empirical results underline the role of size among the characteristics of firms that facilitate energy efficiency innovation. Regarding company behaviour, firms that consider the reduction of environmental impacts to be an important objective of innovation and that have introduced organisational innovations are more likely to innovate with the objective of increasing energy efficiency.

Abstract:Theoretical and empirical approaches have stressed the existence of financial constraints in firms' innovative activities. Although a large number of innovation projects are abandoned before their completion, the empirical evidence has focused on the determinants of innovation while failed projects have received little attention. This paper analyses the role of financial obstacles on the likelihood of abandoning an innovation project by using panel data of potential innovative Spanish firms for the period 2005-2013. Our analysis differentiates between internal and external barriers on the probability of abandoning a project and we examine whether the effects are different depending on the stage of the innovation process. Controlling for potential endogeneity, we use a bivariate probit model to take into account the simultaneity of financial constraints and the decision to abandon an innovation project. Our results show that financial constraints most affect the probability of abandoning an innovation project during the concept stage.

This paper analyzes the effect of firms' innovation activities on their growth performance. In particular, we observe how important innovation is for high-growth firms (HGFs) for an extensive sample of Spanish manufacturing and services firms. The panel data used comprises diverse waves of Spanish CIS over the the period 2004-2008. First, a probit analysis determines whether innovation affects the probability of being a high-growth firm. And second, a quantile regression technique is applied to explore the determinants and characteristics of specific groups of firms (manufacturing versus service firms and high-tech versus low-tech firms). It is revealed that R&D plays a significant role in the probability of becoming a HGF. Investment in internal and external R&D per employee has a positive impact on firm growth (although internal R&D presents a significant impact in the last quantiles, external R&D is significant up to the median). Furthermore, we show evidence that there is a positive impact of employment (sales) growth on the sales (employment) growth.