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Productivity, Innovation and R&D: Micro Evidence for Italy
European Economic Review (2006)
  • Maria Laura Parisi
  • Fabio Schiantarelli, Boston College
  • Alessandro Sembenelli

By exploiting a rich firm level data-base, this paper presents novel empirical evidence on the effect of process and product innovations on productivity, as well as on the role played by R&D and fixed capital investment in enhancing the likelihood of introducing innovations at the firm level. Our results imply that process innovation has a large impact on productivity. Furthermore, R&D spending is strongly positively associated with the probability of introducing a new product, whereas fixed capital spending increases the likelihood of introducing a process innovation. The latter result might reflect the fact that new technologies are frequently embodied in new capital goods. However, the effect of fixed investment on the probability of introducing a process innovation is magnified by R&D spending internal to the firm. This implies that R&D can affect productivity growth by facilitating the absorption of new technologies.

  • Productivity,
  • Innovation,
  • Absorption,
  • R&D
Publication Date
November, 2006
Citation Information
Maria Laura Parisi, Fabio Schiantarelli and Alessandro Sembenelli. "Productivity, Innovation and R&D: Micro Evidence for Italy" European Economic Review Vol. 50 Iss. 8 (2006)
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