Determinants of Innovation: The Message from New Indicators by Alfred Kleinknecht

By Alfred Kleinknecht

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In sum, we do not obtain convincing model estimates for output-orientated innovation measures; in any case, the results remain below expert expectations as expressed in OECD (1992), Eurostat (1992) or Kleinknecht (1993). We should note, however, that our definitions deviate somewhat from those in the CIS questionnaire. The estimation results may indicate that the relationship between a (technical) innovation and success in the market place is not straightforward. Because these indicators seem to capture, at least partly, the effects of market creation and development, they cannot be explained exclusively by determinants of innovative activity; a more adequate model should probably include additional variables reflecting a firm's marketing capabilities (quality of its distribution network, advertising activities, financial ressources and so on).

Estimates with the output-orientated innovation measures SP 1, SP 2, NEW and NEWGROW also yield a reduced influence of the general technological potential (TPOT). It should further be noted that, notwithstanding some interaction with the appropriability variables and some of the measures of technological opportunities, firm size contributes considerably to the explanation of innovative activity in all cases we investigated; hence, firm size reflects additional explanatory factors not taken into account in our model (and not captured by industry dummies).

As far as the latter plays a role, the overall measure for external knowledge (EXTINT) seems to be more strongly related to innovation than do the more specific indicators SOURCE 1, 2, 3. Among the latter, the science-related sources (SOURCE 1), comprising information from private and public research institutions (including universities), as well as information disclosed by patent documents is important for both kinds of innovation, but more pronounced in estimates with input-orientated innovation measures.

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