Product Innovation and Corporate Governance in Turbulent Times: Evidence from Italian SMEs

  • Marco Cucculelli
Part of the Contributions to Economics book series (CE)


The paper uses longitudinal data from a sample of 142 Italian family firms to examine how a firm’s decisions of strategic relevance – like the introduction of a new product and the founder succession – are affected by short-term external factors and firm-specific factors. The empirical analysis exploits the advantages of a conditional risk set duration model, which allows taking into account the multiple ordered occurrences of similar failures (multiple product introductions and successions) during the company life.

Econometric evidence shows that both product introduction and succession are delayed by a recession and that the probability for these events to occur increases as the negative effect of downturns tend to vanish, but at different rates.


Failure Time Product Innovation Chief Executive Officer Product Introduction Product Portfolio 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Adams R, Almeida H, Ferreira D (2009) Understanding the relationship between founder-CEOs and firm performance. J Empirical Finance 16:136–150CrossRefGoogle Scholar
  2. Álvarez R, Benavente JM, Crespi G (2006) Does economic crisis spur organizational change? Evidence from Chilean manufacturing plants, available at:
  3. Alvarez R, Görg H (2009) Multinationals and plant exit: evidence from Chile. Int Rev Econ Finance 18(1):45–51, JanuaryCrossRefGoogle Scholar
  4. Anderson R, Reeb D (2003) Founding-family ownership and firm performance: evidence from the S&P 500. J Finance 58:1301–1328CrossRefGoogle Scholar
  5. Arundel, A., Kabla, I. (1998) What percentage of innovations are patented? Empirical estimates for European firms, Research Policy 27:127–141Google Scholar
  6. Becheikh N, Landry R, Armara N (2006) Lessons from innovation empirical studies in manufacturing sector: a systematic review of the literature from 1993–2003. Technovation 26:644–664CrossRefGoogle Scholar
  7. Bernard A, Redding S, Schoot P (2010) Multi-products firms and products switching. Am Econ Rev 100(2):444–448CrossRefGoogle Scholar
  8. Bhattacharjee A, Higson C, Holly S, Kattuman P (2007) Macroeconomic conditions and business exit: determinants of failures and acquisitions of UK firms. Center for dynamic macroeconomic analysis working paper series, available at:
  9. Caballero R, Hammour M (1994) The cleansing effect of recessions. Am Econ Rev 84(5):1350–1368Google Scholar
  10. Cleves MA (1999) Analysis of multiple failure-time survival data.
  11. Cleves MA, Gould W, Gutierrez RG (2004) An introduction to survival analysis using Stata. Stata Press, College StationGoogle Scholar
  12. Corsino M (2008) Product innovation and growth: the case of integrated circuits. LEM working paper 2008–02, Sant’Anna School of Advanced Studies, PisaGoogle Scholar
  13. Cucculelli M, Micucci G (2008) Family succession and firm performance: evidence from Italian family firms. J Corp Finance 14(1):17–31CrossRefGoogle Scholar
  14. Davis S, Haltiwanger JC (1992) Gross job creation, gross job destruction, and employment reallocation. Quar J Econ 107(3):819–863, AugustCrossRefGoogle Scholar
  15. Devinney TM (1990) New products over the business cycle. J Prod Innovat Manag 7:261–273CrossRefGoogle Scholar
  16. Flor ML, Oltra MJ (2004) Identification of innovating firms through technological innovation indicators: an application to the Spanish ceramic tile industry. Res Policy 33:323–336CrossRefGoogle Scholar
  17. Freeman C. Soete L. Townsend J. (1982) Fluctuations in the Numbers of Product and Process Innovations 1920–1980, Paper for the OECD Workshop on Patent and Innovation Statistics, June 28–30, ParisGoogle Scholar
  18. Geroski P, Mazzucato M (2002) Learning and the sources of corporate growth. Ind Corp Change 11:623–644CrossRefGoogle Scholar
  19. Hall BH, Lotti F, Mairesse J (2009) Innovation and productivity in SMEs: empirical evidence for Italy. Small Bus Econ 33:13–33CrossRefGoogle Scholar
  20. ISTAT ( 2009) Annual Report, RomaGoogle Scholar
  21. Kauffman Foundation (2009) The economic future just happened. Kauffman 2009 Fast FactsGoogle Scholar
  22. Kimhi A (1994) Optimal timing of farm transferal from parent to child. Am J Agr Econ 76:228–236CrossRefGoogle Scholar
  23. Kleinknecht A. 1990 “Are there Schumpeterian Waves of Innovations?”, Cambridge Journal of Economics, vol. 14, n. 1, pp. 81–92.Google Scholar
  24. Kleinknecht A, Van Montfort K, Brouwer E (2002) The non-trivial choice between innovation indicators. Econ Innov New Technol 11(2):109–121CrossRefGoogle Scholar
  25. Miljkovic D (1999) Optimal timing in the problem of family farm transfer from parent to child: an option value approach. J Dev Econ 61:543–552CrossRefGoogle Scholar
  26. Nickell S, Nicolitsas D, Patterson M (2001) Does doing badly encourage management innovation? Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, 63(1):5–28Google Scholar
  27. Nishimura K, Nakajima T, Kiyota K (2005) Does the natural selection mechanism still work in severe recessions? Examination of the Japanese economy in the 1990s. J Econ Behav Organ 58(1):53–78CrossRefGoogle Scholar
  28. Oulton N. (1987) Plant Closure ad the Productivity Miracle in Manufacturing, National Institute Economic Review, 53–59, AugustGoogle Scholar
  29. Wasserman N (2003) Founder-CEO succession and the paradox of entrepreneurial success. Organ Sci 14:149–172CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  1. 1.Department of Economics and Social SciencesUniversità Politecnica delle MarcheAnconaItaly

Personalised recommendations