Professor Elizabeth Webster: Does innovation enhance firm survival? (not always)
From: Wednesday November 2, 2011, 12:00 pm
To: Wednesday November 2, 2011, 2:00 pm
On Wednesday 2 November, Professor Elizabeth Webster presented her talk: Does innovation enhance firm survival? (not always) Although many companies compete through the development of new technologies and products, it is well known that innovation is inherently risky and therefore may increase the ex ante likelihood of both exceptional company performance and bankruptcy. Existing empirical studies however consistently find a positive relationship between innovative activity and company survival. We argue that this conclusion may be a result of a simple selection effect. Using a panel of almost 300,000 Australian companies, we use a hazard model to examine the relationship between innovation and company survival. As expected, we find that the degree of uncertainty embodied in different innovation proxies does shape the pattern of company survival. Professor Beth Webster is an economist and Director of the Intellectual Property Research Institute of Australia (IPRIA) and Professorial Research Fellow at the Melbourne Institute of Applied Economic and Social Research (University of Melbourne). Her recent publications include ‘Patent infringement in Australia: Results from a survey’ Federal Law Review (with Kimberlee Weatherall); ‘Do patents matter for commercialization?’, Journal of Law and Economics 2011 (with Paul Jensen); and ‘Misclassification in Patent Offices’ Review of Economics and Statistics (with Alfons Palangkaraya and Paul Jensen).
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