Is Demand-Pulled Innovation Equally Important in Different Groups of Firms?

By M. Piva, M. Vivarelli. Social Science Research Network, 2007

127 citations recorded by the source corpus.

Previous empirical literature - mainly cross-sectional - has tested the demand-pull hypothesis and found that overall, evidence does not conflict with the idea that innovation may be driven by output. Using a balanced panel of 216 Italian manufacturing firms over the 1995-2000 period, and checking for fixed effects, time, sectoral and size dummies and for the path-dependent nature of R&D, we also find a (barely significant) role of sales in inducing R&D expenditures. However, at the micro level, the demand-pull effect plays a varying role for the different sub-samples of firms. In particular, exporting firms, those which are liquidity-constrained, those not receiving public subsidies and those not heading a business group, seem to be particularly sensitive to sales in deciding their R&D expenditures. These microeconometric results have been obtained using a Least Squares Dummy Variable Corrected (LSDVC) estimator, a recently-proposed panel data technique particularly suitable for small samples.

Subfields: Economics and Econometrics, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/1184f97e3195d0eddf6eb019a6956e547547b368

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Citations in the corpus

No money, no honey? Financial versus knowledge and demand constraints on innovation (2017, background): “line with some empirical contributions (Cainelli et al., 2006; Piva and Vivarelli, 2007; GarcíaQuevedo et al., 2016) we would expect also that a perception of a reasonable degree of certainty on customers’ responses to new products, and a dominant position in the market would reduce”
Embodied and disembodied technological change: The sectoral patterns of job-creation and job-destruction (2019, result): “7 This is consistent with the “demand-pull” approach originally proposed by Schmookler (1962 and 1966) and empirically supported by various studies within the economics of innovation literature (see Scherer, 1982; Kleinknecht and Verspagen, 1990; Piva and Vivarelli, 2007).”
R&D drivers and age: : Are young firms different? (2014, background): “In this line, various theoretical and empirical approaches, both at the aggregate (see Schmookler, 1966; Scherer 1982; Kleinknecht and Verspagen, 1990; Geroski and Walters, 1995) and at the microeconomic level (see Brouwer and Kleinknecht, 1996, 1999; Piva and Vivarelli, 2007) converged to consider ”
R&D Determinants: accounting for the differences between research and development (2014, background): “They have usually performed partial analyses focused on specific determinants of R&D, such as size (Cohen and Klepper, 1996), competition (Aghion et al, 2005), demand pull (Piva and Vivarelli, 2007), technological opportunity (Klevorick”