The Risks of Innovation : Are Innovating Firms Less Likely to Die?

The Risks of Innovation : Are Innovating Firms Less Likely to Die?

While innovation matters for competitiveness it may expose firms to survival risks. Using plant-product data for Chile and discrete-time hazard models we show that innovating plants have a lower hazard of exit. However, risk impacts strongly on the innovation-exit relationship: only innovators that...

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Bibliographic Details
Main Authors: Fernandes, Ana M., Paunov, Caroline
Format: Journal Article
Language:en_US
Published: MIT Press 2015
Subjects:
firm exit
firm survival
product innovation
multi-product firms
Online Access:http://hdl.handle.net/10986/21485
id okr-10986-21485
recordtype oai_dc
spelling okr-10986-214852021-04-23T14:04:02Z The Risks of Innovation : Are Innovating Firms Less Likely to Die? Fernandes, Ana M. Paunov, Caroline firm exit firm survival product innovation multi-product firms While innovation matters for competitiveness it may expose firms to survival risks. Using plant-product data for Chile and discrete-time hazard models we show that innovating plants have a lower hazard of exit. However, risk impacts strongly on the innovation-exit relationship: only innovators that retain diversified sources of revenue or face lower market risk are less likely to die. Single-product innovators are at greater risk of exiting. Exposure to technical risk does not affect exit probabilities differentially. We provide tentative evidence that single-product innovators have higher profits which helps to rationalize their innovation decision despite the increased risk of exit. 2015-02-24T20:37:11Z 2015-02-24T20:37:11Z 2014-03-21 Journal Article Review of Economics and Statistics 0034-6535 http://hdl.handle.net/10986/21485 en_US CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank MIT Press Publications & Research Publications & Research :: Journal Article Chile
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language en_US
topic firm exit
firm survival
product innovation
multi-product firms
spellingShingle firm exit
firm survival
product innovation
multi-product firms
Fernandes, Ana M.
Paunov, Caroline
The Risks of Innovation : Are Innovating Firms Less Likely to Die?
geographic_facet Chile
description While innovation matters for competitiveness it may expose firms to survival risks. Using plant-product data for Chile and discrete-time hazard models we show that innovating plants have a lower hazard of exit. However, risk impacts strongly on the innovation-exit relationship: only innovators that retain diversified sources of revenue or face lower market risk are less likely to die. Single-product innovators are at greater risk of exiting. Exposure to technical risk does not affect exit probabilities differentially. We provide tentative evidence that single-product innovators have higher profits which helps to rationalize their innovation decision despite the increased risk of exit.
format Journal Article
author Fernandes, Ana M.
Paunov, Caroline
author_facet Fernandes, Ana M.
Paunov, Caroline
author_sort Fernandes, Ana M.
title The Risks of Innovation : Are Innovating Firms Less Likely to Die?
title_short The Risks of Innovation : Are Innovating Firms Less Likely to Die?
title_full The Risks of Innovation : Are Innovating Firms Less Likely to Die?
title_fullStr The Risks of Innovation : Are Innovating Firms Less Likely to Die?
title_full_unstemmed The Risks of Innovation : Are Innovating Firms Less Likely to Die?
title_sort risks of innovation : are innovating firms less likely to die?
publisher MIT Press
publishDate 2015
url http://hdl.handle.net/10986/21485
_version_ 1764448404037959680

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