2011•Unpublished venueRequires access

Productivity, Process Innovation, and Product Innovation in Industrial and Service Firms

Jacques Mairesse, Stéphane Robin

Abstract

We examine the effect of innovation on productivity in France using a multiple-equation model that accounts for R&D and for product and process innovation, and that controls for selection and endogeneity biases. We estimate the model on CIS3 and CIS4 data using two distinct procedures. Process innovation is the main driver of productivity in manufacturing, but our results are less reliable in services. Sensitivity analyses suggest that both our innovation indicators tend to measure overall innovation only. Using a single indicator, we find a positive effect of innovation in all industries and periods. We conclude with some cautionary words on the measurement of product and process innovation and the joint modelling of their impact on productivity.

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Key concepts: Productivity, Endogeneity, Product innovation, Product (mathematics), Process (computing), Industrial organization, Measure (data warehouse), Business