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The Knowledge Production Function: Evidence from New Micro Data
KTH, Superseded Departments, Industrial Economics and Management.ORCID iD: 0000-0002-5871-8571
2002 (English)Doctoral thesis, comprehensive summary (Other scientific)
Abstract [en]

This doctoral thesis consists of five self-contained essays.Common themes that unify the essays are the conditions for innovative engagements and the effort to endogenize innovations into the explanation of profitability, productivity and growthin manufacturing and service production. The purpose is to explore the importance of innovation in explaining heterogeneity in the performance of firms. The traditional analysis of the relationship between research and developmentand productivity is extended and developed by using, on the onehand, firm-level data not previously available and, on theother, a modern state-of-the-art econometric framework.

Essay I. Methods and results are reviewed and stylized facts presented regarding the return on innovation. The limitations of the data and methods used in mainstream literature are discussed. A set of firm-level observations recently made available and a multiple knowledge production function analysis have been used to clarify the role of innovation in explaining performance heterogeneity among manufacturing firms inSweden.

Essay II. The relationships between innovation and productivity among manufacturing firms in Finland, Norway and Sweden are studied. The main purpose is to investigate the contributions of firm-level innovation in creating the large observed differences in aggregated productivity growth between Norway on the one hand and Finland and Sweden on the other.

Essay III. The focus of this essay is threefold. One, since innovation has been found to be a major contributor to productivity growth in manufacturing, we seek to find whether there is any evidence for the notion that service industrie shave a lower propensity to be innovative or that they are less efficient in deriving benefits from innovations. Second, we consider what real productivity growth does, and what the measurement methods do to produce the reported weak growthrates in services. Third, given that intermediate services have been found to be one of the fastest growing input factors inmanufacturing, largely reflecting the replacement of internally provided activities by externally produced outputs, we examine what the impact of outsourcing is on productivity growth in manufacturing. The essay brings a comparative perspective to these issues by analyzing the firm-level data on innovativeactivities and economic performance in knowledge-intensive manufacturing and service firms in Sweden.

Essay IV.This essay investigates the sensitivity of estimated relationships between innovation and firm performance. The essay compares the sensitivity of results with regards to different types of models, estimation methods, measures of firm performance, classification of firms, type of innovations and data sources. The analyses are performed on both the level and growth rate of firm performance, and theinfluence of outliers is explored.

Essay V. The role of capital structure and external financing in innovation and production is studied. Results from different model specifications are explored. A preferred dynamic model with flexible adjustment is used for an inter-country and an intra-country comparison of the determinants of the optimal mix between debt and equity as wellas the rate of change towards an optimal capital structure.

Place, publisher, year, edition, pages
Stockholm: KTH , 2002. , p. 25
Series
TRITA-IEO, ISSN 1100-7982 ; 2002:2
Keyword [en]
Knowledge capital, performance heterogeneity, innovation, manufacturing, srvices, Community Innovation Survey, cross-country comparisons, outsosurcing, capital structure, dynamic adjustment, panel data
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
URN: urn:nbn:se:kth:diva-3301ISBN: 91-7283-250-9 (print)OAI: oai:DiVA.org:kth-3301DiVA, id: diva2:9087
Public defence
2002-02-22, 00:00 (English)
Note

QC 20100526

Available from: 2002-02-07 Created: 2002-02-07 Last updated: 2017-01-20Bibliographically approved
List of papers
1. Knowledge capital and performance heterogeneity: A firm-level innovation study
Open this publication in new window or tab >>Knowledge capital and performance heterogeneity: A firm-level innovation study
2002 (English)In: International Journal of Production Economics, ISSN 0925-5273, E-ISSN 1873-7579, Vol. 76, no 1, p. 61-85Article in journal (Refereed) Published
Abstract [en]

This paper is an empirical analysis of knowledge capital and performance heterogeneity at the firm level. We apply new econometric methods to extensive data on innovation and innovative activities in Swedish manufacturing. A number of interesting results emerge. First, the results show that knowledge capital, defined as the ratio of innovation sales to total sales, is found to be a significant factor contributing to performance heterogeneity among firms. This relationship holds even when we control for human capital, type of output, firm size. and the entry. merger., partial closure or exit of firms. Second. knowledge capital rises with innovation input. the firm's internal knowledge for innovation, and co-operation on innovation with domestic universities. Third, when controlling for differences in innovation investments and human capital, knowledge-intensive firms are not more innovative than labor-intensive or capital-intensive firms. Fourth, organizational rigidities in innovation projects and a lack of appropriate investment sources for innovative activities are found to have a negative impact on productivity. Finally, we find a positive association between an outspoken aggressive innovation strategy, customers and a firm's internal resources for innovation and the size of innovation investment.

National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:kth:diva-13082 (URN)000173951900006 ()
Note
QC 20100526Available from: 2010-05-26 Created: 2010-05-26 Last updated: 2017-12-12Bibliographically approved
2. Innovation and Performance in Manufacturing Industries: a Comparison of the Nordic Countries
Open this publication in new window or tab >>Innovation and Performance in Manufacturing Industries: a Comparison of the Nordic Countries
2001 (English)In: SSE/EFI Working Paper Series in Economics and Finance, ISSN 1402-9928, Vol. Aug, no 457Article in journal (Refereed) Published
Abstract [en]

The availability of new internationally-harmonized innovation survey data collected from OECD countries has created some interesting opportunities for studying the following two key areas: (1) the determinants of innovation behavior at firm level, and (2) innovation as an important factor contributing to the economic growth. This paper looks at the relationship between innovation and productivity in Finland, Norway and Sweden at the firm level.

Although these countries enjoy a high degree of political, social and cultural similarities, they differ largely from one another in their productivity growth and national innovation systems.

The main objective here has been to examine how an identically-specified econometric model might work when the survey sampling and questionnaire are identical but the national data sets are estimated separately. Findings from the micro-based data in Europe known as Community Innovation Survey (CIS) data were subsequently investigated to see whether or not they contributed to explaining the presence of cross-country differences in aggregated productivity growth. Results reveal major discrepancies between the estimated firm-level results and the aggregated figures. Differences in the country regression results were investigated to see whether they were due to data errors, the econometric model, model specifications, estimation methods or unobservable country-specific effects. The tentative conclusion is that the representativeness of the respondent firms, the model specification and unobservable country specific effects may partly account for the deviations between macro and micro levels.
Keyword
Community Innovation Survey, CIS, cross-country comparisons, innovation, manufacturing, firms
National Category
Production Engineering, Human Work Science and Ergonomics
Identifiers
urn:nbn:se:kth:diva-13107 (URN)
Note
QC 20100527Available from: 2010-05-27 Created: 2010-05-27 Last updated: 2010-05-27Bibliographically approved
3. A Comparative Perspective on Innovation, Outsourcing and Productivity in Knowledge-Intensive Firms
Open this publication in new window or tab >>A Comparative Perspective on Innovation, Outsourcing and Productivity in Knowledge-Intensive Firms
2005 (English)In: Entrepreneurships, the New Economy and Public Policy, Berlin: Springer, 2005, p. 181-202Chapter in book (Other academic)
Abstract [en]

This paper serves as another complementary link in a chain of a rather limited number of investigations in the R&D-innovation-productivity relationship within service industries. Innovation has been found to be a major contributor to productivity growth in manufacturing. In this paper, the importance of innovation is explored by comparing manufacturing and service firms in a sample of knowledge intensive industries. In particular, we intend to find evidence on the following two issues. First, is there any evidence that the reported weak rate of productivity growth in knowledge intensive services can be explained by a low propensity to be innovative? Second, is it possible that knowledge-intensive service firms are less efficient in deriving benefits from innovation than knowledge-intensive manufacturing firms? Empirical results based on innovation survey data indicate a surprising similarity in innovation performance between the two categories of firms.

Place, publisher, year, edition, pages
Berlin: Springer, 2005
Keyword
Productivity, Innovation, Manufacturing, Services, Applied Econometrics
National Category
Other Mechanical Engineering
Identifiers
urn:nbn:se:kth:diva-13108 (URN)10.1007/3-540-26994-0_11 (DOI)2-s2.0-77951058111 (Scopus ID)978-3-540-22613-0 (ISBN)978-3-540-26994-6 (ISBN)
Note

QC 20100527

Available from: 2010-05-27 Created: 2010-05-27 Last updated: 2013-07-05Bibliographically approved
4. On the relationship between innovation and performance: A sensitivity analysis
Open this publication in new window or tab >>On the relationship between innovation and performance: A sensitivity analysis
2006 (English)In: Economics of Innovation and New Technology, ISSN 1043-8599, E-ISSN 1476-8364, Vol. 15, no 4-5, p. 317-344Article in journal (Refereed) Published
Abstract [en]

We examine sensitivity of the estimated relationship between innovation and firm performance. In doing so, we rely on a knowledge production function approach and carry out comparisons in a number of ways. The sensitivity analysis is based on the comparison of a basic econometric model estimated assuming different error structure and using the same data source, an identical model but different data sources, different classifications of firms performance, different classifications of innovation and the two main different subpopulations of the business sector. The analyses are performed in both level and growth-rate dimensions. New findings are reported and previous results are confirmed as well. The study gives indications of what factors cause variations in the estimated effects of interest and the direction of changes.

Keyword
Knowledge capital; Productivity; Innovation; Manufacturing; Services; Knowledge intensity; Community innovation survey
National Category
Other Mechanical Engineering
Identifiers
urn:nbn:se:kth:diva-13109 (URN)10.1080/10438590500512810 (DOI)
Note
QC 20100526Available from: 2010-05-27 Created: 2010-05-27 Last updated: 2017-12-12Bibliographically approved
5. Dynamic optimal capital structure and technical change
Open this publication in new window or tab >>Dynamic optimal capital structure and technical change
2004 (English)In: Structural Dynamics and Economic Change, ISSN 0954-349x, Vol. 15, no 4, p. 449-468Article in journal (Refereed) Published
Abstract [en]
The importance of capital structure is explored by comparing existing archetypes of financial systems through a new methodological application. Differences in firms’ cost of capital show that capital structure is relevant in R&D and other investment decisions. The conclusions are that (1) there are large and also unexpected cross-country differences in determinants to optimal capital structure; (2) observed leverage is often different from target in both equity (or stock market based)- and debt (or bank based)-dominated systems; and (3) faster speed towards the target is observed in the equity-based system indicating a higher flexibility.
Keyword
Capital structure; Panel data; Financial markets; Cross-country comparison
National Category
Other Mechanical Engineering
Identifiers
urn:nbn:se:kth:diva-13110 (URN)10.1016/j.strueco.2003.05.001 (DOI)2-s2.0-8144221751 (Scopus ID)
Note
QC 20100527Available from: 2010-05-27 Created: 2010-05-27 Last updated: 2017-12-12Bibliographically approved

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