Work

Innovating Firms and Aggregate Innovation

Year: 2004

Type: article

Abstract: We develop a parsimonious model of innovation to confront firm‐level evidence. It captures the dynamics of individual heterogeneous firms, describes the behavior of an industry with firm entry and exit, and delivers a general equilibrium model of technological change. While unifying the theoretical analysis of firms, industries, and the aggregate economy, the model yields insights into empirical work on innovating firms. It accounts for the persistence of firms’ R&D investment, the concentration of R&D among incumbents, the link between R&D and patenting, and why R&D as a fraction of revenues is positively correlated with firm productivity but not with firm size or growth.

Source: Journal of Political Economy

DOI: 10.1086/422563

Authors: Tor Jakob Klette, Samuel Kortum

Institutions: University of Oslo, Centre for Economic Policy Research, University of Minnesota, National Bureau of Economic Research, Federal Reserve Bank of Minneapolis

Language: English

Topic: Firm Innovation and Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: green

OpenAlex ID: W3125350312

FWCI: 51.66

Cites: 77

Cited by: 1,178

Related to: 10