Inside innovation persistence: New evidence from Italian micro-data

Abstract

This paper contributes the analysis of the persistence of innovation activities, as measured by different innovation indicators and explores its past and path dependent characteristics. The study provides new insights on the role of R&D investments in innovation persistence and analyses differentiated patterns of persistence across product and process innovation, by accounting for complementarity effects between the two types of innovative behaviour. The empirical analysis is based on a sample of 451 Italian manufacturing companies observed during the years 1998-2006, and exploits both descriptive techniques such as Transition Probability Matrix and econometric methods based on dynamic probit models. Results highlight the relevance of innovation persistence. The highest level of persistence is found for R&D-based innovation activities, witnessing the actual presence of significant entry and exit barriers. Moreover, we obtain more robust evidence of persistence for product innovation than for process innovation when complementarity effects between the two types of innovation are accounted for.

Comparing Persistence of Product and Process Innovation: A Discrete-Time Duration Analysis of Innovation Spells

“…The phenomenon called "persistence of innovation" is an important topic in the literature on innovation (Antonelli et al, 2012a). The persistence of innovative behavior is identified if a firm which innovates once has a higher probability of innovating again in subsequent periods.…”

“…Nevertheless, only a few studies pay attention to different patterns of persistence across both types of innovation. Some related literature indicates that product innovation is more persistent than process innovation (Martínez-Ros and Labeaga, 2009;Antonelli et al, 2012a). However, the understanding of the different drivers of persistence in product and process innovation remains limited.…”

“…Although most of the studies recognized that there is complementarity between product and process innovation (Reichstein and Salter, 2006), a different pattern of persistence should be considered. Some empirical literature indicates that product innovation is more persistent than process innovation (Martínez-Ros and Labeaga, 2009;Antonelli et al, 2012a); persistence is found for product but not for process innovation (Parisi et al, 2006), or its scale and significance differ between both of them (Clausen et al, 2012). In this regard, the diversity of innovative strategies must be considered.…”

“…On the one hand, past dependence allows us to identify persistence depending on previous degree of innovation persistence (Antonelli et al, 2012a). On the other hand, path dependence provides a framework for modeling the effects of historic time on the behavior of agents which are able at each point in time to modify their evolution (Antonelli, 1997).…”

Environmental innovation and socio-economic dynamics in institutional and policy contexts

“…The development of such an integrated and dynamic oriented approach allows both (1) the full investigation of the nature and characteristics of the various relationships between environmental innovations, environmental performances and more general economic, trade and technological dynamics , and (2) the assessment of the way in which institutional factors, including market and policy factors, affect environmental innovation trajectories (Crespi 2013). In this analytical context, the study of nonlinear economic-environmental dynamics, lock-in and path-dependence effects, as well as the role of innovation complementarities (Antonelli et al 2012;Mohnen and Röller 2005;Reichstein and Salter 2006) are, among others, possible research directions to be further developed. The investigation of the role of systemic policy action as an institutional factor shaping market behavior is also very relevant in this context (Edquist 2001).…”