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Title:Persistence of Innovation: Stylised Facts and Panel Data Evidence PDF Logo
Authors:Peters, Bettina
Issue Date:2005
Series/Report no.:ZEW Discussion Papers 05-81
Abstract:This paper investigates whether firms innovate persistently or discontinuously over time using an innovation panel data set on German manufacturing and service firms for the period 1994?2002. We find that innovation behaviour is permanent at the firm?level to a very large extent. Using a dynamic random effects discrete choice model and a new estimator recently proposed by Wooldrigde (2005), we further shed some light on the driving forces for this phenomenon. The econometric results confirm the hypothesis of true state dependence for manufacturing as well as for service sector firms. In addition to past innovation experience, the results further highlight the important role of knowledge provided by skilled employees and unobserved individual heterogeneity in explaining the persistence of innovation.
Subjects:innovation
persistence
state dependence
unobserved heterogeneity
dynamic random effects panel probit model
JEL:L20
C23
O31
C25
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des ZEW
ZEW Discussion Papers

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