Article
Modeling the virtuous circle of innovation. A test on Italian firms
Industrial and Corporate Change
(2016)
Abstract
This article investigates the “virtuous circle” between innovative inputs, outputs, and economic performance
with a three-equation model highlighting feedback loops and simultaneous relations. An
empirical test is conducted of innovative expenditure, innovative sales, and economic results in a
sample of Italian manufacturing firms, comparing occasional and serial innovators. The data, for
1998–2007, are drawn from a rich panel of Italian firms with 20 or more employees compiled by the
Italian National Institute of Statistics including three waves of Community Innovation Surveys. The
model extends that developed at the industry level by Bogliacino and Pianta (Industrial and Corporate
Change, 2013a, 22(3), 649–678; Innovation and demand in industry dynamics: R&D, new products and
profits, in A. Pyka and E. S. Andersen (eds), Long Term Economic Development, Economic
Complexity and Evolution. Springer-Verlag: Berlin, 2013b) and confirms those earlier findings. For the
core of persistent innovators, there are complex links at play in different phases of the innovation process
and in the feedback between economic success and sustained innovation expenditure.
Keywords
- Innovation,
- Italian firms,
- Profits,
- Performance
Disciplines
Publication Date
2016
DOI
doi: 10.1093/icc/dtw045
Citation Information
Francesco Bogliacino, Matteo Lucchese, Leopoldo Nascia and Mario Pianta. "Modeling the virtuous circle of innovation. A test on Italian firms" Industrial and Corporate Change (2016) Available at: http://works.bepress.com/mario_pianta/140/