Scandinavian Working Papers in Economics

Working Paper Series in Economics and Institutions of Innovation,
Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies

No 24: Firm Level Innovation and Productivity - Is there a Common Story Across Countries?

Norbert Janz (), Hans Lööf () and Bettina Peters ()
Additional contact information
Norbert Janz: Aachen University of Applied Science, Department of Business Studies, Postal: Eupener Str. 70, D-52066 Aachen, Germany
Hans Lööf: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Bettina Peters: Forschungsbereich: Industrieökonomik und Internationale Unternehmensführung., Postal: L7,1, D-68161 Mannheim, Postfach 103443, D-68034

Abstract: Recent studies have documented extensive heterogeneity in firm performance within countries, and innovation has been found as an important determinant. This paper addresses the issue of innovation firm performance across countries. A growing number of national firm level studies on the innovation-productivity link have been conducted using new internationally harmonized survey data, known in Europe as Community Innovation Survey (CIS). Mainly due to confidentiality reasons cross-country comparisons of CIS data are still rare. The contribution of this paper is its unique approach of pooling original firm observations from Germany and Sweden. Applying a knowledge production function that gives the relationship between innovation input, innovation output and productivity, we find to a very large extent a common cross-country story for knowledge intensive manufacturing firms. Some interesting country-specific effects are reported as well.

Keywords: Innovation; Productivity; Cross-Country Comparison; Applied Econometrics

JEL-codes: C34; C51; D24; O33; P52

31 pages, December 10, 2004

Note: Other versions of the paper: Janz, N., H. Lööf and B. Peters , 2003. “ Firm Lev el Innovation and productivity - Is there a Common Story Across Countries?" Discussion Paper No 03-26, ZEW, Centre of European Economic Research,

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