The Commercial Success of Innovations: an Econometric Analysis at the Firm Level in French Manufacturing

Abstract

This paper offers some empirical evidence on how do product and process innovations affect manufacturing sales and exports. Accounting for differences in technological opportunities between industries, and the “market pull” or “technology push” nature of firms’ innovations, we explain the share of new products in total sales and exports by the innovation types firms have implemented. The data come from the French Ministry of Industry’s Innovation survey 1986–1990. The left-hand variables are the sales revenues and the export revenues of the firms that are attributable to products introduced within the last 5 years. Given that the survey reports only interval data, our estimates were obtained by maximum likelihood on the ordered probit model. The following results are obtained: (i) The contribution of products less than 5 years old is lower to overall exports than to total sales but the innovative content is stronger in exports than in domestic sales; (ii) The greater the underlying technological opportunities, the less successful are product imitations; (iii) Both domestic sales and exports are mostly made of product improvements; (iv) Firm size has a positive effect on innovation output only when the technological opportunity is strong.

We thank W. J. Adams, B. H. Hall, N. Iung, F. Laisney, F. Melese and two anonymous referees for helpful suggestions and comments as well as the participants at the Xth ADRES Conference on the Economics and Econometrics of Innovation (Strasbourg, June 1996) and at the XIVth Journees de Microeconomie Appliquee (Marrakech, May 1997). The usual disclaimer applies.