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 has a strong impact on the innovation-exit relationship: only innovators...

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Bibliographic Details
Main Authors:	Fernandes, Ana M., Paunov, Caroline
Format:	Journal Article
Language:	en_US
Published:	MIT Press 2016
Subjects:	innovation competitiveness revenue diversity
Online Access:	http://hdl.handle.net/10986/23943

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recordtype	oai_dc
spelling	okr-10986-239432021-04-23T14:04:18Z The Risks of Innovation : Are Innovating Firms Less Likely to Die? Fernandes, Ana M. Paunov, Caroline innovation competitiveness revenue diversity 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 has a strong impact 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 singleproduct innovators have higher profits, which helps to rationalize their innovation decision despite the increased risk of exit. 2016-03-11T19:36:33Z 2016-03-11T19:36:33Z 2015-07 Journal Article Review of Economics and Statistics 0034-6535 http://hdl.handle.net/10986/23943 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 :: Journal Article Publications & Research 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	innovation competitiveness revenue diversity
spellingShingle	innovation competitiveness revenue diversity 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 has a strong impact 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 singleproduct 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	2016
url	http://hdl.handle.net/10986/23943
_version_	1764455230090510336

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

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