UNU-MERIT Working Papers Series
The role of innovation in industrial dynamics and productivity growth: a survey of the literature
Mehmet Ugur & Marco Vivarelli #2020-038We review the theoretical underpinnings and the empirical findings of
the literature that investigates the effects of innovation on firm
survival and firm productivity, which constitute the two main channels
through which innovation drives growth. We aim to contribute to the
ongoing debate along three paths. First, we discuss the extent to which
the theoretical perspectives that inform the empirical models allow for
heterogeneity in the effects of R&D/innovation on firm survival and
productivity. Secondly, we draw attention to recent modelling and
estimation effort that reveals novel sources of heterogeneity,
non-linearity and volatility in the gains from R&D/innovation,
particularly in terms of its effects on firm survival and productivity.
Our third contribution is to link our findings with those from prior
reviews to demonstrate how the state of the art is evolving and with
what implications for future research.
Keywords: Innovation, R&D, Survival, Productivity
JEL classification: O30, O33
Download the working paper (PDF)
