Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/89300
Authors: 
Coad, Alex
Rao, Rekha
Year of Publication: 
2007
Series/Report no.: 
LEM Working Paper Series 2006/18
Abstract: 
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 innovativeness. 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 firms. Using a quantile regression approach, we observe that innovation is of crucial importance for a handful of superstar fast-growth firms. We also discuss policy implications of our results.
Subjects: 
Innovation
Firm Growth
Quantile Regression
Innovation Policy
Patents
JEL: 
O31
L25
Document Type: 
Working Paper

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