Innovation in Firms

A Microeconomic Perspective

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Innovation has become a key factor for economic growth, but how does the process take place at the level of individual firms? This book presents the main results of the OECD Innovation Microdata Project -- the first large-scale effort to exploit firm-level data from innovation surveys across 20 countries in an internationally harmonised way, with a view to addressing common analytical questions. Through the use of common indicators and econometric modeling, this analytical report presents a broad overview of how firms innovate in different countries, highlights some of the limitations of current innovation surveys, and identifies directions for future research.

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Innovation and Productivity

Extending the Core Model

The OECD core model (see Chapter 3) achieved quite remarkable results even if constrained by international benchmarking requirements (use of a “simpler” model in order to include a number of OECD countries). However, important variables were omitted or simplified to enable international comparisons. Obvious examples are: the use of a sub-optimal productivity equation (value added or total factor productivity variables would have been better candidates for productivity measures than total turnover); omission of important production factors such as measures of human and physical capital; and the use of binary variables when quantitative ones were available for some countries (e.g. exports).


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