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A Comparative Perspective on Innovation, Outsourcing and Productivity in Knowledge-Intensive Firms
KTH, School of Industrial Engineering and Management (ITM), Industrial Economics and Management (Dept.), Industrial Economics and Management (Div.) (closed (20130101). KTH, School of Architecture and the Built Environment (ABE), Centres, Centre of Excellence for Science and Innovation Studies, CESIS (closed 20110701).ORCID iD: 0000-0002-5871-8571
2005 (English)In: Entrepreneurships, the New Economy and Public Policy, Berlin: Springer, 2005, 181-202 p.Chapter in book (Other academic)
Abstract [en]

This paper serves as another complementary link in a chain of a rather limited number of investigations in the R&D-innovation-productivity relationship within service industries. Innovation has been found to be a major contributor to productivity growth in manufacturing. In this paper, the importance of innovation is explored by comparing manufacturing and service firms in a sample of knowledge intensive industries. In particular, we intend to find evidence on the following two issues. First, is there any evidence that the reported weak rate of productivity growth in knowledge intensive services can be explained by a low propensity to be innovative? Second, is it possible that knowledge-intensive service firms are less efficient in deriving benefits from innovation than knowledge-intensive manufacturing firms? Empirical results based on innovation survey data indicate a surprising similarity in innovation performance between the two categories of firms.

Place, publisher, year, edition, pages
Berlin: Springer, 2005. 181-202 p.
Keyword [en]
Productivity, Innovation, Manufacturing, Services, Applied Econometrics
National Category
Other Mechanical Engineering
URN: urn:nbn:se:kth:diva-13108DOI: 10.1007/3-540-26994-0_11ScopusID: 2-s2.0-77951058111ISBN: 978-3-540-22613-0 (Print)ISBN: 978-3-540-26994-6 (Online)OAI: diva2:320908

QC 20100527

Available from: 2010-05-27 Created: 2010-05-27 Last updated: 2013-07-05Bibliographically approved
In thesis
1. The Knowledge Production Function: Evidence from New Micro Data
Open this publication in new window or tab >>The Knowledge Production Function: Evidence from New Micro Data
2002 (English)Doctoral thesis, comprehensive summary (Other scientific)
Abstract [en]

This doctoral thesis consists of five self-contained essays.Common themes that unify the essays are the conditions for innovative engagements and the effort to endogenize innovations into the explanation of profitability, productivity and growthin manufacturing and service production. The purpose is to explore the importance of innovation in explaining heterogeneity in the performance of firms. The traditional analysis of the relationship between research and developmentand productivity is extended and developed by using, on the onehand, firm-level data not previously available and, on theother, a modern state-of-the-art econometric framework.

Essay I. Methods and results are reviewed and stylized facts presented regarding the return on innovation. The limitations of the data and methods used in mainstream literature are discussed. A set of firm-level observations recently made available and a multiple knowledge production function analysis have been used to clarify the role of innovation in explaining performance heterogeneity among manufacturing firms inSweden.

Essay II. The relationships between innovation and productivity among manufacturing firms in Finland, Norway and Sweden are studied. The main purpose is to investigate the contributions of firm-level innovation in creating the large observed differences in aggregated productivity growth between Norway on the one hand and Finland and Sweden on the other.

Essay III. The focus of this essay is threefold. One, since innovation has been found to be a major contributor to productivity growth in manufacturing, we seek to find whether there is any evidence for the notion that service industrie shave a lower propensity to be innovative or that they are less efficient in deriving benefits from innovations. Second, we consider what real productivity growth does, and what the measurement methods do to produce the reported weak growthrates in services. Third, given that intermediate services have been found to be one of the fastest growing input factors inmanufacturing, largely reflecting the replacement of internally provided activities by externally produced outputs, we examine what the impact of outsourcing is on productivity growth in manufacturing. The essay brings a comparative perspective to these issues by analyzing the firm-level data on innovativeactivities and economic performance in knowledge-intensive manufacturing and service firms in Sweden.

Essay IV.This essay investigates the sensitivity of estimated relationships between innovation and firm performance. The essay compares the sensitivity of results with regards to different types of models, estimation methods, measures of firm performance, classification of firms, type of innovations and data sources. The analyses are performed on both the level and growth rate of firm performance, and theinfluence of outliers is explored.

Essay V. The role of capital structure and external financing in innovation and production is studied. Results from different model specifications are explored. A preferred dynamic model with flexible adjustment is used for an inter-country and an intra-country comparison of the determinants of the optimal mix between debt and equity as wellas the rate of change towards an optimal capital structure.

Place, publisher, year, edition, pages
Stockholm: KTH, 2002. 25 p.
Trita-IEO, 2002:2
Knowledge capital, performance heterogeneity, innovation, manufacturing, srvices, Community Innovation Survey, cross-country comparisons, outsosurcing, capital structure, dynamic adjustment, panel data
National Category
Production Engineering, Human Work Science and Ergonomics
urn:nbn:se:kth:diva-3301 (URN)91-7283-250-9 (ISBN)
Public defence
2002-02-22, 00:00 (English)
QC 20100526Available from: 2002-02-07 Created: 2002-02-07 Last updated: 2010-05-27Bibliographically approved

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