Openness and Innovation - Home and Export Demand Effects on Manufacturing Innovation: Panel Data Evidence for Ireland and Switzerland
Open access
Date
2008-09Type
- Working Paper
ETH Bibliography
yes
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Abstract
Recent studies in the tradition of Schmookler have re-emphasised the potential role of demand in stimulating innovation. Here, we reconsider the role of ‘home’ and ‘export’ market demand in stimulating manufacturing innovation using comparable panel data for two small open economies – Ireland and Switzerland. Our analysis is based on the estimation of reduced form innovation production functions using panel data estimators over the sample period 1994 to 2005. For a range of innovation indicators, however, we find little evidence of any significant market demand effects, with innovation performance instead determined largely by firm-level capability effects and characteristics. In policy and strategy terms this suggests the continued value of measures to improve innovation capability regardless of market demand conditions. In more methodological terms our results suggest the validity of the usual assumption implicit in modelling innovation outputs that supply-side factors predominate. Show more
Permanent link
https://doi.org/10.3929/ethz-a-005703343Publication status
publishedJournal / series
KOF Working PapersVolume
Publisher
KOF Swiss Economic Institute, ETH ZurichSubject
IRLAND, INSEL (WESTEUROPA); EXPORT (FOREIGN TRADE); Demand; DOMESTIC TRADE + DOMESTIC MARKET; NACHFRAGE (WIRTSCHAFTSTHEORIE); PRODUCT INNOVATION + PRODUCT IMPROVEMENT; Ireland; Switzerland; IRELAND, ISLAND (WESTERN EUROPE); BINNENHANDEL + BINNENMARKT; SWITZERLAND (CENTRAL EUROPE). SWISS CONFEDERATION; SCHWEIZ (MITTELEUROPA). SCHWEIZERISCHE EIDGENOSSENSCHAFT; DEMAND (ECONOMIC THEORY); Innovation; TECHNISCHER FORTSCHRITT; AUSFUHR + EXPORT (AUSSENHANDEL); PRODUKTINNOVATION + PRODUKTWEITERENTWICKLUNG; TECHNICAL PROGRESSOrganisational unit
02525 - KOF Konjunkturforschungsstelle / KOF Swiss Economic Institute
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ETH Bibliography
yes
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