Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/29484 
Year of Publication: 
1993
Series/Report no.: 
ZEW Discussion Papers No. 93-08
Publisher: 
Zentrum für Europäische Wirtschaftsforschung (ZEW), Mannheim
Abstract: 
This paper addresses three major aspects of firms' process innovative activity: forward- looking behaviour, uncertainty w.r.t. returns of R&D investments, and oligopolistic competition on the product market. Assuming that R&D expenditures are cost-reducing investments, we derive an Euler equation for process innovations and discuss alternative panel econometric approaches suitable to the case where only qualitative information is available. Empirical results are based on an unbalanced panel of German manufacturing firms for 1984-1989 and suggest that the Schumpeterian causality from firm size to innovation activity might in fact be attributed, at least partly, to heterogeneity in the perception of process innovative success.
Document Type: 
Working Paper
Document Version: 
Digitized Version

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