Measuring process innovation output: Results from firm-level panel data


Rammer, Christian


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URN: urn:nbn:de:bsz:180-madoc-620304
Document Type: Working paper
Year of publication: 2022
The title of a journal, publication series: ZEW Discussion Papers
Volume: 22-002
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: O31 , O32 , O33,
Keywords (English): process innovation , innovation output , panel data , Community Innovation Survey
Abstract: Process innovation is an important part of firms’ innovation activities and supposed to significantly contribute to positive returns from innovation. Measuring process innovation output at the firm level is still in its infancy, however. This paper reports empirical evidence on measures of process innovation output that have been collected in the German part of the Community Innovation Survey (CIS) over the past 25 years. Distinguishing between cost reduction and quality improvement, the paper finds low item non-response for the qualitative (yes/no) part of both indicators. Item non-response is much higher for quantitative information and does not decrease with questionnaire experience of firms. For both cost reduction and quality improvement, response to quantitative indicators is categorical in nature, and firms tend to report the same set of values when participating frequently in the survey. The determinants of realising the two types of process innovation output are very similar. The observed variance in the quantitative part is difficult to explain for both measures. The impact of process innovation output on firm performance is limited. While cost reduction seems to spur the export share, sales increase due to quality improvement is associated with higher profitability.

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