Survey of the literature on innovation and economic performance

Mazzucato, Mariana and Demirel, Pelin (2009) Survey of the literature on innovation and economic performance. Discussion Paper. FINNOV.

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Abstract

Despite very strong differences in their treatment of technological change in economic theory, both the neoclassical and the more Schumpetarian (and evolutionary) economic approaches often assume that market selection rewards the most innovative firms. However, despite such strong assumptions, empirical evidence on whether innovative firms perform better than non-innovative firms remains inconclusive. If innovators do not grow more, does this imply that market selection fails? And does the different impact of innovation on industrial performance (measured by firm growth and profitability) and financial performance (measured by market value and stock returns) signal differences in how industrial and financial markets
react to firm level efforts around innovation? This discussion paper reviews the literature on the interaction between innovation and economic/financial performance, and outlines the way that work within FINNOV Work Package 2 (SELECTION), Co-Evolution of Industry Dynamics and Financial Dynamics, will contribute to better understanding this interaction.

Item Type: Reports and working papers (Discussion Paper)
Schools and Departments: School of Business, Management and Economics > SPRU - Science Policy Research Unit
Depositing User: Mariana Mazzucato
Date Deposited: 06 Feb 2012 19:44
Last Modified: 05 Jun 2013 09:11
URI: http://sro.sussex.ac.uk/id/eprint/22003
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