Internal and external factors in innovation persistence

Abstract

This paper contributes the analysis of the persistence of innovation activities, as measured by total factor productivity (TFP), and explores its internal and external determinants stressing its path-dependent characteristics. The external conditions, namely the quality of local knowledge pools and the strength of the Schumpeterian rivalry, along with the internal conditions (the actual levels of dynamic capabilities, as proxied by wage levels and firm size) exert a specific and localised effect upon the persistent introduction of innovations. A Multiple Transition Probability Matrixes (MTPMs) approach has been implemented to capture the contingent effects of external effects on long-term innovation persistence. The empirical analysis of the dynamics of firm level TFP for a sample of approximately 7000 Italian manufacturing companies observed during the years 1996-2005 is based on both the comparison of different transition probability matrixes and on dynamic discrete choice panel data models. The evidence provided by the test of MTPMs in sub-periods suggests that innovation persistence is path-dependent, as opposed to past-dependent. JEL CLASSIFICATION: O31, C23, C25, L20

Innovation strategies, external knowledge and productivity growth

“…This research supports the assumption that all firms in a local milieu such as a cluster or an agglomeration may not benefit from access to a high concentration of specialized, supplemented or varied knowledge diffused through voluntary (mostly pecuniary) and involuntary mechanisms. Contributors to this literature include Feldman (2003), Conte and Vivarelli (2005), Cassiman and Veugelers (2006b), Love andRoper (2009), Antonelli, Crespi, andScellato (2013), Lööf and Johansson (2014), and Antonelli and David (2015). For an additional contribution and a survey of the field of research, see Antonelli and Colombelli (2015).…”

Conceptual Model of Technological Change on Telecentre Effectiveness

“…As observed by (Antonelli et al, 2013), inventions and scientific breakthroughs have the capability of making some portions of the stock of knowledge or technologies obsolete. It involves studying the relationship between complementary technologies, knowledge relatedness, and invention outcomes in high technology mergers.…”

Productivity growth persistence: firm strategies, size and system properties

“…In this context of analysis, the presence of persistent patterns of above average productivity growth at the firm level can be interpreted as the result of the capability of firms to exploit dynamic capabilities to sustain competitive advantages as highlighted by management studies (Teece and Pisano, 1994;Verona and Ravasi, 2003;Teece, 2007;Vergne and Durand, 2011). In particular, building on recent developments in the economics of innovation that have paid attention to the analysis of innovation persistence (Malerba et al, 1997;Cefis, 2003;Peters, 2008;Roper and Dundas, 2008;Antonelli et al, 2012Antonelli et al, , 2013, it can be claimed that the repeated interactions between the accumulation of knowledge and the creation of routines to valorize and exploit it within the same organization may lead to the creation of dynamic capabilities that favour the systematic realization of above average productivity performances (Nelson and Winter 1982;Rothaermel and Hess 2007;Verona and Ravasi, 2003). This framework emphasizes that the past has a significant impact on current and future performances.…”

“…Hence, the role of knowledge cumulativeness and the relevance of strategic decisions to leverage internal and external knowledge is considered to be crucial in shaping pathdependent dynamics of productivity growth (Antonelli et al, 2013;Crespi and Scellato, 2014).…”