Persistence in lnnovation and Profitability

digital

Article

Magazine

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI

Fascicle

RIVISTA INTERNAZIONALE DI SCIENZE SOCIALI - 2003 - 1

Title

Persistence in lnnovation and Profitability

Author

Elena Cefis

Publisher

Vita e Pensiero

Format

Article |

Pdf

Online from

09-2017

Issn

0035-676X (print) | 1827-7918 (digital)

€ 6.00

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Description

The paper investigates the relationship between the strong inertia of finns profits and the persistence in innovative activities. The empirical analysis implements a non-parametric approach based on modelling the dynamics of the evolving cross-section distributions to analyse firms' intradistribution mobility and persistence. Results suggest that firms which are systematic innovators and earn profits above the average have large probabilities to keep innovating and earning profits above the average, as well as vice versa. Firm's relative position in innovation matters in the long run: the probability to earn profits above the average, is higher if firms start as systematic innovators.