Skip to main content
Article thumbnail
Location of Repository

Firm heterogeneity within industries: How important is “industry” to innovation?

By Tommy Clausen


In this paper we assess how important “industry” is to innovation. Our empirical estimates suggest that “industry factors” matter little to how firms’ search for new innovations. These results offer empirical support to recent evolutionary theory where firms have heterogeneous capabilities and pursue different approaches to innovation. Structural variables at the industry level do however have a substantial influence on the firm level propensity to innovate. This result supports “sectoral innovation system” approaches where firms are “constrained” by technological regimes underlying industry evolution. Hence, the driving forces behind technological evolution are found at both the firm and industry level.

OAI identifier:

Suggested articles


  1. (2000). 4 This is taken from the Centre for Multilevel Modelling (CMM) website at the University of Bristol which is one of the leading research institutions when it comes to multilevel modelling. 25
  2. (2008). A behavioural theory of the firm, Englewood Cliffs, NJ:Prentice Hall.
  3. (2005). A framework for applying organizational routines in empirical research: linking antecedents, characteristics and performance outcomes of recurrent interaction patterns.
  4. (1984). A resource-based view of the firm.
  5. (1982). An Evolutionary Theory of Economic Change,
  6. (1986). An overview of innovation, in
  7. (2005). and Challenges in Innovation Studies.
  8. (2005). Applying organizational routines in understanding organizational change.
  9. (1987). Appropriating the returns from industrial research and development.
  10. (1985). Clio and the economics of QWERTY.
  11. (1985). Do markets differ much?
  12. (1997). Dynamic capabilities and strategic management.
  13. (2006). Economic development from the perspective of evolutionary economic theory. Working Papers
  14. (1999). Evolution and institutions: On Evolutionary Economics and the Evolution of Economics.
  15. (2007). Evolutionary and new growth theories. Are they converging?
  16. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance.
  17. (1991). Firm resources and sustained competitive advantage.
  18. (1980). Firm Size and Efficient Entrepreneurial Activity: A reformulation of the Schumpeter Hypothesis.
  19. (1985). Firm Size and R&D Intensity.
  20. (2006). Firm size, sectors and countries as sources of variety in innovation.
  21. (1997). Getting to know you: a theory of strategic group identity.
  22. (1996). How much does industry matter? An alternative empirical test.
  23. (1994). Increasing Returns and Path-Dependence in the Economy.
  24. (1997). Industrial Structures and Dynamics: Evidence, Interpretations and Puzzles.
  25. (2005). Innovation and economic growth in: Fagerberg,
  26. (2007). Innovation and the Competitiveness of Industries: Comparing the Mainstream and Evolutionary Approaches. Technological Forecasting and Social Change. In press.
  27. (2006). Innovation and the evolution of industries.
  28. (2005). Innovation in “Low-Tech” Industries in: Fagerberg,
  29. (1996). Mastering the Dynamics of Innovation.
  30. (2000). Modern Sociological Theory.
  31. (2002). Multilevel analysis: techniques and applications. Mahwah, N.J.: Lawrence Erlbaum Associates Klepper, S.,
  32. (2004). Multilevel modelling. Sage Publications: Thousand Oaks,
  33. (2007). On the convergence of evolutionary and behavioural theories of organizations. A tentative roadmap. LEM working paper series.
  34. (1995). On the sources and significance of interindustry differences in technological opportunities.
  35. (2003). Organizational learning from performance feedback. A behavioural perspective on innovation and change.
  36. (2004). Organizational routines: a review of the literature.
  37. (1999). Organizations Evolving. Sage Publications. Archibugi, D.,
  38. (1984). Patterns of technical change: towards a taxonomy and a theory.
  39. (1985). R&D appropriability, opportunities, and market structure: New evidence on some Schumpeterian hypotheses.
  40. (1995). Recent evolutionary theorizing about economic change,
  41. (2003). Schumpeter and the revival of evolutionary economics: an appraisal of the literate.
  42. (1984). Schumpeterian competition in alternative technological environments.
  43. (1996). Schumpeterian patterns of innovation are technology-specific,
  44. (2005). Sectoral systems: How and why innovation differ across sectors in: Fagerberg,
  45. (2005). Systems of Innovation in:
  46. (1982). Technological paradigms and technological trajectories: a suggested interpretation of the determinants and directions of technical change.
  47. (2007). Technological paradigms, regimes and trajectories: Manufacturing and service industries in a new taxonomy of sectoral patterns of innovation.
  48. (2000). Technological Regimes and Schumpeterian Patterns of Innovation.
  49. (2002). Technology and the dynamics of industrial structures: an empirical mapping of Dutch manufacturing.
  50. (2002). Technology-gaps, innovation-diffusion and transformation: an evolutionary interpretation.
  51. (2005). The Oxford Handbook of Innovation.
  52. (1982). The Role of Knowledge in R&D efficiency.
  53. (1934). The Theory of Economic Development.
  54. (1988). Tobin’s q and the importance of focus in firm performance”.
  55. (1961). Uncertainty, learning and the Economics of Parallel Research and Development Efforts.
  56. (2003). Understanding dynamic capabilities.
  57. (2007). What exactly are technological regimes? Intra-industry heterogeneity in the organization of innovative activities.
  58. (1991). Why do firms differ and how does it matter?,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.