Does Innovation Lead to Firm Growth? Explorative versus Exploitative Innovations

Figures & data

Table 1. Descriptive statistics.

Variables	Mean	Std. Dev.	Min	Max
Employment	11.3	124.9	1	23,588
Employment growth	0.027	0.305	–0.916	1.099
Explorative innovation	0.0012	0.0345	0	1
Exploitative innovation	0.0018	0.0429	0	1
Annual wage	202	142	0	33,100
Physical capital	7,778	218,000	0	72,800,000
Sector gross value added	139,000,000	119,000,000	437	447,000,000

Table 2. Results, regression coefficients.

	(1)	(2)	(3)
L1. Δ log employment	0.126	0.103	0.0963
	(0.90)	(0.98)	(0.90)
L2. Δ log employment	0.0162	0.0212	0.0220
	(0.93)	(1.49)	(1.53)
Exploitative innovation	0.0232*		0.00309
	(1.92)		(0.24)
L1. Exploitative innovation	0.0170*		0.00405
	(1.75)		(0.38)
L2. Exploitative innovation	–0.00135		–0.00597
	(–0.15)		(–0.65)
Explorative innovation		0.0347***	0.0336***
		(3.19)	(2.86)
L1. Explorative innovation		0.0262***	0.0245**
		(2.77)	(2.25)
L2. Explorative innovation		0.0218**	0.0220**
		(2.49)	(2.19)
Δ Log wage	–0.0275***	–0.0540***	–0.0537***
	(–6.93)	(–11.92)	(–11.64)
Δ Log physical capital	0.00327***	0.00213***	0.00213***
	(18.77)	(22.50)	(22.52)
Δ Log sector gross value added	0.00464***	0.00304*	0.00306*
	(3.06)	(1.88)	(1.90)
Constant	–0.0354***	–0.0514***	–0.0515***
	(–6.84)	(–9.58)	(–9.63)
No. of observations	1,173,311	1,173,311	1,173,311
Sargan value	52.17	83.88	84.5
Sargan p-value	0.833	0.998	0.996
AR(1)	–4.42	–5.72	–5.57
AR(1) p-value	0.000	0.000	0.000
AR(2)	1.33	1.52	1.43
AR(2) p-value	0.183	0.129	0.154

Note: *** denotes 0.1% significance; ** denotes 1% significance; * denotes 5% significance. L. denotes the lag operator and, hence, L1. stands for one-year lag etc. All specifications include dummy variables for ownership, year, region and industry.

Data availability statement

The data that support the findings of this study are available from Statistics Sweden (SCB). Restrictions are applied to the availability of these data, which are used under licence for this study. Further information on how to access these data can be found at:

https://www.scb.se/en/services/ordering-data-and-statistics/guidance-for-researchers-and-universities/