Using the second Community Innovation Survey (CIS-2) for the Netherlands, we analyse the input and output stages of the innovation process and the links between the innovation process and overall economic performance. We investigate the existence of feedback links running from past economic performance to the input and the output stage of the innovation process and compare the results of a single-equation approach with the results obtained from a simultaneous-equation model.Innovation, Research, Technological Opportunities, Simultaneous-EQUATION Models, Economic Performance,

Several noted surveys on intra-industry dynamics have recently reached the conclusion from a large body of evidence that Gibrat's Law does not hold. However, almost all of these studies have been based on manufacturing. There are compelling reasons to doubt whether these findings hold for the services. In this paper we examine whether the basic tenet underlying Gibrat's Law-that growth rates are independent of firm size-can be rejected for the services as it has been for manufacturing. Based on a large sample of Dutch firms the evidence suggests that growth rates are, in fact, independent of firm size. Validation of Gibrat's Law in the services suggests that the dynamics of industrial organisation for services may not simply mirror that for manufacturing. 5001-6182 Business 5546-5548.6 Office Organization and Management Library of Congress Classification (LCC) HD 9980-9990 Service industries M Business Administration and Business Economics L 20 Firm Objectives, Organization and Behavior: general Journal of Economic Literature (JEL) D 21 Firm Behavior 85 A Business General 270 A 100 G Strategic Management Organizational Growth European Business Schools Library Group (EBSLG) 160 D Industrial/ managerial economics, theory of the firm Gemeenschappelijke Onderwerpsontsluiting (GOO) 85.00 Bedrijfskunde, Organisatiekunde: algemeen 85.10 Strategisch beleid Classification GOO 85.10 Strategisch beleid Bedrijfskunde / Bedrijfseconomie Strategisch management, organisatievernieuwing

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We embed the innovation production function in a model that analyzes the impact of innovation output on manufacturing multi-factor productivity (MFP) growth. We combine a market share model with a gross output production function. This revenue approach enables a 'demand-shift' interpretation of the contribution of innovation to MFP growth. We apply different sets of instrumental variables and different estimation methods to estimate simultaneously the returns from innovation investment to innovation output, the contribution of innovation output to productivity growth and the feedback link running from a firm's overall sales performance to its innovation endeavor. We draw our empirical results from the second Community Innovation Survey (CIS-2) for the Netherlands. The estimation results from our model show that the impact of innovation differs between measures of firm performance, and that, in our data, the revenue function approach yields more sensible results for the contribution of innovation to MFP growth than the value-added production function framework. Furthermore, the results show that the estimation of return on innovation investment benefits from the inclusion of more information on the technological environment of the firm.Innovation, Research, Technological opportunities, Simultaneous-equation models, Economic performance, Productivity,

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[fre] Plusieurs enquêtes sur les dynamiques internes des industries ont récemment permis d'en conclure que la loi de Gibrat ne tient pas. La découverte la plus importante a révélé que plus une entreprise grandit, plus son taux de croissance diminue. Dans ce document (à la recherche de preuves supplémentaires confortant les résultats obtenus récemment sur un échantillon important de nouvelles entreprises hollandaises de petites dimensions du secteur de l'hébergement) nous examinons si l'hypothèse selon laquelle les taux de croissance sont indépendants de la taille des entreprises peut être rejetée pour les services, comme ce fut le cas pour les entreprises de fabrication manufacturière, même pour les nouvelles entreprises italiennes du secteur de l'hébergement. En effet, sur un échantillon de nouvelles entreprises sélectionnées dans cinq groupes d'affaires différents, la loi de Gibrat est rejetée pour trois groupes et pour l'industrie dans son ensemble, alors qu'elle est confirmée pour les deux autres groupes. Par conséquent, dans certains groupes d'affaires du secteur de l'hébergement les plus petites parmi les nouvelles entreprises doivent initialement fournir des efforts poussés pour atteindre une taille comparable à celle des entreprises concurrentes de dimensions plus importantes. Cependant, les entreprises dont le taux de croissance est très rapide au cours des premières années d'activité connaissent ensuite un ralentissement de leur croissance lorsqu'elles atteignent une dimension assez importante pour accroître leurs chances de survie. [eng] Several surveys on intra-industry dynamics have recently reached the conclusion from a large body of evidence that Gibrat's Law does not hold, i.e., the main finding is that firm growth decreases with firm size. In this paper - in search of further evidence supporting the results recently obtained for a large sample of small scale Dutch incumbent and new-born firms in the hospitality sector - we examine whether the assumption that growth rates are independent of firm size can be rejected for the services, as it has been for manufacturing, also in the case of Italian new-born firms in the hospitality sector. In fact, based on a large sample composed only by new-born firms in five business groups, the evidence suggests that Gibrat's Law is rejected for three business groups ones and for the industry as a whole, whereas it is confirmed for the two remaining business groups. Thus, also in some business groups in the hospitality sector smaller ones among new-born firms have initially to rush in order to reach a size comparable to that of larger entrants. However, firms growing very fast in the initial year(s) after start-up turn out to slow down their growth once they reach a size large enough to enhance their likelihood of survival.

Abstract:The extent of -and -convergence of average labor productivity across manufacturing industries in 18 OECD-countries over the period 1972-1992 show large inter-industry differences. One reason for these differences is knowledge and capital barriers preventing catch-up to occur. We find the level of average labor productivity, as a proxy for these barriers, to be correlated with the extent of convergence. JEL-code: J24, L60

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