The role of demand in fostering product vs process innovation / Herbert Dawid (University of Bielefeld), Gabriele Pellegrino (EPFL), Marco Vivarelli (Università Cattolica del Sacro Cuore, IZA and UNU-MERIT) ; IZA Institute of Labor Economics
VerfasserDawid, Herbert ; Pellegrino, Gabriele ; Vivarelli, Marco
KörperschaftForschungsinstitut zur Zukunft der Arbeit
ErschienenBonn, Germany : IZA Institute of Labor Economics, June 2017
Elektronische Ressource
Umfang1 Online-Ressource (22 Seiten) : Diagramme
SerieDiscussion paper ; no. 10846
 Das Dokument ist öffentlich zugänglich im Rahmen des deutschen Urheberrechts.
The role of demand in fostering product vs process innovation [0.39 mb]
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While the extant innovation literature has provided extensive evidence of the so-called "demand-pull" effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors.