European Business Schools Librarian's Group

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 0446: On the Relationship between Innovation and Performance: A sensitivity Analysis

Hans Lööf () and Almas Heshmati ()
Additional contact information
Hans Lööf: Department of Industrial Economics and Management, Postal: Royal Institute of Technology, 100 44 Stockholm, Sweden
Almas Heshmati: The United Nations University, WIDER, Postal: Katajanokkanlaituri 6B, Fin-00160 Helsinki, Finland

Abstract: The objective of this study is to investigate the sensitivity of the estimated relationship between innovation and firm performance. In doing so, we rely on a knowledge production function approach and carry out comparisons in a number of respects. The sensitivity analysis is based on the comparison of a basic econometric model with different alternative models using the same data sources, an identical model but different data sources, different classifications of firm performance and different classifications of innovation. The analyses are performed in both level and growth rate dimensions. The overall picture gives indications of what factors cause variations in the estimated effects of interest and the direction of changes.

Keywords: Knowledge capital; productivity; innovation; manufacturing; services; knowledge intensity; Community Innovation Survey

JEL-codes: C24; C31; L60; O31; O32

42 pages, First version: May 17, 2001. Revised: October 1, 2001.

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