Product Innovation and Growth: The Case of Integrated Circuits

A puzzling evidence stemming from the applied research on growth and innovation is that successful innovations do not appear to have a significant effect on sales growth rates, at odds with the expectation that successful innovators will prosper at the expenses of their less able competitors. The present paper tests a research hypothesis claiming that the level of observation at which applied research is typically conducted hampers the identification of a significant association between innovation and sales growth rates. Exploiting a unique and original database comprising detailed information on product innovations by leading semiconductor companies, we find components commercialized in the nearest past to positively affect the stream of corporate revenues.Firm Growth; Product Innovation; Semiconductor industry

Product Innovation and Growth: The Case of Integrated Circuits.

Applied research on growth and innovation seems to suggest that successful innovations do not significantly enhance firm growth. This paper tests the hypothesis that the level of observation at which applied research is typically conducted hampers identification of a significant association between innovation and sales growth rates. Exploiting a unique data set, we find that product innovations commercialized in the immediate past positively affect the corporate revenue streams of semiconductor companies.firm growth; product innovation; semiconductor industry

Product Innovation and Firm Growth: Evidence from the Integrated Circuits Industry

Applied research on growth and innovation seems to suggest that successful innovations do not significantly enhance firm growth. This paper tests the hypothesis that the level of observation at which applied research is typically conducted hampers identification of a significant association between innovation and sales growth rates. Exploiting a unique data set, we find that product innovations commercialized in the immediate past positively affect the corporate revenue streams of semiconductor companies.

Job flows in Italian SMEs: a longitudinal analysis of growth, size and age

The paper proposes an empirical investigation of job flows for continuing manufacturing firms in Italy from 1996 to 2004 using high quality data on work forces and other characteristics of the firm. The magnitude of the job flows for small and medium-sized limited liability companies in Italy is lower than what observed in Anglo-Saxon countries, but it is still in line with evidence for firms in the Euro area. Second, the magnitude of job flows significantly shrunk in the aftermath of the economic downturn in 2001. Firms fared worse than in the late nineties and the labour market became less efficient in allocating job flows. Third, gross job creation and gross job destruction decrease as firm get larger, but when added to compute an indicator of net employment growth, size does not seem to affect firms’ expansion. On the contrary, age significantly hinges on the growth opportunities of small and medium-sized enterprises. The econometric analysis corroborates the major findings of our descriptive investigation referring to the role of size and age. In particular, it shows that classification methods used to define size classes strongly influence the estimated relationship between growth and size industrial regimes play a role in shaping job flows. Our result show that firms in supplier dominated industries fared significantly lower than enterprises in other sectors during the sample period

Organizational capabilities and industry dynamics: a computational model.

In this paper we propose a model of bounded rational organizations that addresses the role of organizational capabilities in shaping firm size, growth rates and profitability. Our approach aims at reconciling the logic behind stochastic models of firm growth with the notion of organizational capabilities as drivers of economic performance. We extend the stochastic framework by incorporating behavioural assumptions on: (a) the interactions between the firm and the business environment; and (b) the mechanism by which firms sense and seize business opportunities. In our perspective, the degree of concurrence between the substance and organization of the firm and the context in which it operates will directly influence its profitability and indirectly (through costly mutations of the organizational structure) drive its growth. Despite its simple nature the model is able to capture well known regularities about industry dynamics. It generates firm size distributions that are skewed and heterogeneous across different scenarios. Moreover, our results suggest that the higher the selective power of the firm's organizational capabilities, the more the steady state distribution deviates from a log normal. Besides, the distribution of growth rates has a tent-shaped form which is consistent with the pattern described in empirical studies. The distribution of opportunities per firm is also skewed suggesting that a very few entities account for a large fraction of business opportunities arising throughout the simulation period. Finally, the interaction between the external environment and the internal structure of the firms also influences the heterogeneity in the value of the opportunities they capture.organizational capabilities; firm size distribution; growth rates; simulation model

Job flows in Italian SMEs: a longitudinal analysis of growth, size and age.

The paper proposes an empirical investigation of job flows for continuing manufacturing firms in Italy from 1996 to 2004 using high quality data on work forces and other characteristics of the firm. The magnitude of the job flows for small and medium-sized limited liability companies in Italy is lower than what observed in Anglo-Saxon countries, but it is still in line with evidence for firms in the Euro area. Second, the magnitude of job flows significantly shrunk in the aftermath of the economic downturn in 2001. Firms fared worse than in the late nineties and the labour market became less efficient in allocating job flows. Third, gross job creation and gross job destruction decrease as firm get larger, but when added to compute an indicator of net employment growth, size does not seem to affect firms' expansion. On the contrary, age significantly hinges on the growth opportunities of small and medium-sized enterprises. The econometric analysis corroborates the major findings of our descriptive investigation referring to the role of size and age. In particular, it shows that classification methods used to define size classes strongly influence the estimated relationship between growth and size industrial regimes play a role in shaping job flows. Our result show that firms in supplier dominated industries fared significantly lower than enterprises in other sectors during the sample period.job creation; job destruction; persistence of jobs; firm growth

R&D, firm size, and product innovation dynamics.

This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and firm size on innovation output. It further explores how structural characteristics of the firm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled firms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.

How Do Organizational Capabilities Shape Industry Dynamics ?

This paper aims to reconcile the logic behind stochastic models of firm growth and the notion of organizational capabilities as drivers of economic performance. In the proposed behavioral model of bounded rational firms, two mechanisms drive growth: independent stochastic growth of individual opportunities and the process by which firms capture new opportunities. To extend the stochastic framework, this research incorporates behavioral assumptions about the interactions between the firm and the business environment and the mechanism by which firms sense and seize business opportunities. The model generates statistical regularities in firm size, growth rates, and profit differentials between firms that are consistent with observed patterns in real-world settings. The greater the selective power of organizational capabilities, the more the steady-state distribution of firm size appears to deviate from log normality, which provides a potential explanation of various observed departures from the Law of Proportionate Effect. With regard to firm diversity, the distribution of opportunities per firm is skewed; just a few entities account for most of the business opportunities that arise during the simulation period. Moreover, the interaction between the external environment and the internal structure of firms influences heterogeneity in the value of the opportunities that they capture, as well as the persistence of long-run profits.Organizational Capabilities; Firm Size Distribution; Growth Rates; Profitability

R&D, Firm Size, and Product Innovation Dynamics.

This paper addresses a debated issue in the economics innovation literature, namely the existence of increasing return to R&D expenditures and sirm size on innovation output. It further explores how structural characteristics of the sirm as well as contextual factors affect the dynamics of product innovation over a relatively long period of time. Taking advantage of an original and unique database comprising innovation data recorded on a monthly base we show that: (i) a negative binomial distribution model is able to predict with great accuracy the probability of having a given number of product announcement sent out in a month; (ii) constant returns to size and R&D expenditure may reasonably characterize the innovation production function of sampled sirms; (iii) vertically integrated manufacturers as well as producers operating a larger product portfolio exhibit a higher propensity to introduce new products than their specialized competitors.

Technology spin-offs: teamwork, autonomy, and the exploitation of business opportunities

This study analyzes the antecedents of technology spin-off resulting from the exploitation of patented technology developed in established firms and then transferred to a new organization. We hypothesize and empirically examine how teamwork and autonomy, two key dimensions of the established organization’s inventive activity, correlate with spin-off formation. The results, based on a large-scale survey of inventors, show that (1) inventive activities organized as teamwork are less likely to engender the creation of a new firm and (2) granting strategic autonomy increases the likelihood of a spin-off whereas structural autonomy decreases the chances of a spin-off