Emerging Tech

Product Innovation And Firm Growth: Evidence From The Integrated Circuits Industry

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Executive Summary

Applied research on growth and innovation seems to suggest that successful innovations do not significantly enhance firm growth. This paper tests the hypothesis that the level of observation at which applied research is typically conducted hampers identification of a significant association between innovation and sales growth rates. Exploiting a unique data set, the authors find that product innovations commercialized in the immediate past positively affect the corporate revenue streams of semiconductor companies. In recent years, an increasing number of empirical studies have examined the relationship between innovativeness and company performance considering different types of models and estimation methods.

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