While the extant innovation literature has provided extensive evidence of the so-called “demand-pull” effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors.

Dawid, H., Pellegrino, G., Vivarelli, M., The role of demand in fostering product vs process innovation: a model and an empirical test, <<JOURNAL OF EVOLUTIONARY ECONOMICS>>, 2021; 31 (5): 1553-1572. [doi:10.1007/s00191-020-00695-3] [http://hdl.handle.net/10807/205738]

The role of demand in fostering product vs process innovation: a model and an empirical test

Pellegrino, Gabriele
;
Vivarelli, Marco
2021

Abstract

While the extant innovation literature has provided extensive evidence of the so-called “demand-pull” effect, the possible diverse impact of demand evolution on product vs process innovation activities has not been yet investigated. This paper develops a formal model predicting a larger inducing impact of past sales in fostering product rather than process innovation. This prediction is then tested through a dynamic microeconometric model, controlling for R&D persistence, sample selection, observed and unobservable individual firm effects and time and sectoral peculiarities. Results are consistent with the model and suggest that an expansionary economic policy may benefit the diffusion of new products or even the emergence of entire new sectors.
2021
Inglese
Dawid, H., Pellegrino, G., Vivarelli, M., The role of demand in fostering product vs process innovation: a model and an empirical test, <<JOURNAL OF EVOLUTIONARY ECONOMICS>>, 2021; 31 (5): 1553-1572. [doi:10.1007/s00191-020-00695-3] [http://hdl.handle.net/10807/205738]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10807/205738
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