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The Economic Research Institute, Stockholm School of Economics SSE/EFI Working Paper Series in Economics and Finance

No 446:
On the Relationship between Innovation and Performance: A sensitivity Analysis

Hans Lf () and Almas Heshmati ()

Abstract: The objective of this study is to investigate the sensitivity of the estimated relationship between innovation and firm performance. In doing so, we rely on a knowledge production function approach and carry out comparisons in a number of respects. The sensitivity analysis is based on the comparison of a basic econometric model with different alternative models using the same data sources, an identical model but different data sources, different classifications of firm performance and different classifications of innovation. The analyses are performed in both level and growth rate dimensions. The overall picture gives indications of what factors cause variations in the estimated effects of interest and the direction of changes.

Keywords: Knowledge capital; productivity; innovation; manufacturing; services; knowledge intensity; Community Innovation Survey; (follow links to similar papers)

JEL-Codes: C24; C31; L60; O31; O32; (follow links to similar papers)

42 pages, May 17, 2001, Revised October 1, 2001

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This paper is forthcoming as:
Lf, Hans and Almas Heshmati, 'On the Relationship between Innovation and Performance: A sensitivity Analysis', Economics of Innovation and New Technology.



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