Innovation and firm growth in high-tech sectors: A quantile regression approach

By Alex Coad, Rekha Rao. 2008

1,047 citations recorded by the source corpus.

We relate innovation to sales growth for incumbent firms in high-tech sectors. A firm, on average, experiences only modest growth and may grow for a number of reasons that may or may not be related to innovative activity. However, given that the returns to innovation are highly skewed and that growth rates distributions are heavy-tailed, it may be misleading to use regression techniques that focus on the ‘average effect for the average firm’. Using a quantile regression approach, we observe that innovation is of crucial importance for a handful of ‘superstar’ fast-growth firms.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/45e99914ac5d24f417149afa1c270e888dd67962

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Citations in the corpus

High-growth firms and technological knowledge: do gazelles follow exploration or exploitation strategies? (2014, background): “One of the main problems that have indeed characterized the analysis of the effects of innovation on growth lies in the difficulty of finding a reliable proxy for innovation activities (Coad and Rao, 2008).”
Importance of Technological Innovation for SME Growth - Evidence from India (2010, neutral): “Coad and Rao (2008) probed the relationship between innovation and sales growth for incumbent firms in high tech sectors.”
The Bright Side of Financial Derivatives: Options Trading and Firm Innovation (2016, neutral): “been extensively used in earlier research to understand the innovation processes of firms within these industries (e.g., Katila and Shane, 2005; Coad and Rao, 2008; Rothaermel and Alexandre, 2009).”
Technical Change and Industrial Dynamics as Evolutionary Processes (2009, result): “These findings were largely confirmed by a follow-on study done a decade later by Cohen et al. (2002). David Teece (1986) and a rich subsequent literature (cf.”
Age and firm growth. Evidence from three European countries (2013, neutral): “…of the conditional distribution of growth rates, and it may be preferable to the usual average regression technique for a number of reasons (Coad and Rao, 2008; pp. 641-642): (i) the normally distributed errors assumption may be relaxed, which is relevant in our case because of the…”
Transnational ties and performance of immigrant entrepreneurs: the role of home-country conditions (2014, methodology): “…model which was first introduced by Evans (1987a, 1987b) and now is commonly used in firm growth studies (Das 1995; Heshmati 2001; Calvo 2006; Coad and Rao 2008; Cucculelli and Ermini 2012): ln SIZEi;t 2 ln SIZEi;t21 ¼ aþ b1 ln SIZEi;t21 þ b2 ln AGEi;t þ ui;t: ð1Þ The growth of any firm i,…”
Is entrepreneurship necessarily good? Microeconomic evidence from developed and developing countries (2013, background): “In fact, a propensity for innovation emerges in general as a firm’s growth driver (see, for instance, Freel, 2000; Coad and Rao, 2008; Altindag et al., 2011; Corsino and Gabriele, 2011) and specifically as a positive predictor of survival and an above-the-average post-entry performance of newborn fi”
Disentangling the effects of organizational capabilities, innovation and firm size on SME sales growth (2013, neutral): “, the highest quartile) category, a finding confirmed in a more recent study by Coad and Rao (2008). However, in another study of SMEs in which a broader range of sales growth is”
A Closer Look at Serial Growth Rate Correlation (2006, methodology): “The models of passive and active learning in the evolution of industries (as proposed by Jovanovic (1982) and Ericson and Pakes (1995), respectively) appear to be supported by our findings, because the growth paths of small firms are quite erratic and noisy whereas those of larger firms are relative”