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Concentration on the few : mechanisms behind a falling share of innovative firms in Germany

Rammer, Christian and Schubert, Torben LU (2018) In Research Policy 47(2). p.379-389
Abstract

Innovation activities in the German business sector showed two opposing trends over the past two decades: While total innovation expenditures grew substantially, the number of firms conducting innovation activities fell sharply. In this paper, we explore the mechanisms behind the declining trend in the share of innovation active firms. Considering both input (R&D activities) and output (introduction of innovations), we model innovation decisions as a multi-stage process using continuous-time Markov chain analysis. We base our analyses on a 14-year panel from the German part of the Community Innovation Survey. Our results show that smaller firms and firms in sectors with less innovation competition are more likely to stop innovating.... (More)

Innovation activities in the German business sector showed two opposing trends over the past two decades: While total innovation expenditures grew substantially, the number of firms conducting innovation activities fell sharply. In this paper, we explore the mechanisms behind the declining trend in the share of innovation active firms. Considering both input (R&D activities) and output (introduction of innovations), we model innovation decisions as a multi-stage process using continuous-time Markov chain analysis. We base our analyses on a 14-year panel from the German part of the Community Innovation Survey. Our results show that smaller firms and firms in sectors with less innovation competition are more likely to stop innovating. We also show that better financial situation and public funding can mitigate the trend towards a falling share of innovating and R&D-performing firms.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Concentration, Decline, Innovation, R&D, SMEs
in
Research Policy
volume
47
issue
2
pages
11 pages
publisher
Elsevier
external identifiers
  • scopus:85038849844
ISSN
0048-7333
DOI
10.1016/j.respol.2017.12.002
language
English
LU publication?
yes
id
fd44849e-2a8c-43b3-a9e8-b3832717b0af
date added to LUP
2018-01-02 13:49:22
date last changed
2018-01-02 13:49:22
@article{fd44849e-2a8c-43b3-a9e8-b3832717b0af,
  abstract     = {<p>Innovation activities in the German business sector showed two opposing trends over the past two decades: While total innovation expenditures grew substantially, the number of firms conducting innovation activities fell sharply. In this paper, we explore the mechanisms behind the declining trend in the share of innovation active firms. Considering both input (R&amp;D activities) and output (introduction of innovations), we model innovation decisions as a multi-stage process using continuous-time Markov chain analysis. We base our analyses on a 14-year panel from the German part of the Community Innovation Survey. Our results show that smaller firms and firms in sectors with less innovation competition are more likely to stop innovating. We also show that better financial situation and public funding can mitigate the trend towards a falling share of innovating and R&amp;D-performing firms.</p>},
  author       = {Rammer, Christian and Schubert, Torben},
  issn         = {0048-7333},
  keyword      = {Concentration,Decline,Innovation,R&D,SMEs},
  language     = {eng},
  month        = {03},
  number       = {2},
  pages        = {379--389},
  publisher    = {Elsevier},
  series       = {Research Policy},
  title        = {Concentration on the few : mechanisms behind a falling share of innovative firms in Germany},
  url          = {http://dx.doi.org/10.1016/j.respol.2017.12.002},
  volume       = {47},
  year         = {2018},
}