Journal of Productivity Analysis

, Volume 34, Issue 1, pp 63–81 | Cite as

Innovation and productivity in knowledge intensive business services

Article

Abstract

This paper studies empirically the relationship between the sources of knowledge, innovation and productivity in Knowledge Intensive Business Services using French micro data and sheds some new light on the production of knowledge and on effects of innovative output on firm productivity. Both an innovation function and a production function augmented with dummy endogenous innovation are estimated. Three estimators which control for endogeneity of the dummy innovation are employed: the first is a maximum likelihood estimator of the equations’ system while the other two are built in the instrumental variables framework. These estimators give useful complementary information because of the usual efficiency-robustness tradeoff comparing system-equations and single-equation estimators. We find that innovation is frequent in Knowledge Intensive Business Services and has a strong and positive effect on productivity. As in manufacturing, the main determinant of innovation is formal knowledge resulting from R&D or from acquisitions of equipment, patents or licenses.

Keywords

Productivity Innovation R&D Knowledge intensive business services 

JEL Classification

O31 O32 O33 L8 C31 C33 

Notes

Acknowledgments

We thank Pierre Blanchard, Bertrand Koebel, Jean-Philippe Lesne, Claude Mathieu, Pierre Mohnen, Stéphane Robin, Patrick Sevestre, two anonymous referees and an associate editor of this review for useful comments. Any remaining errors are ours.

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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  1. 1.INRA-CESAERDijonFrance
  2. 2.Spatial Economics Research Center, Department of Geography and EnvironmentLondon School of EconomicsLondonUK
  3. 3.ERUDITE Université Paris XII Val de MarneCréteil cédexFrance

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