THE PAYBACK OF EFFECTIVE INNOVATION PROGRAMS

摘要

Despite the widely held belief of the importance of innovation, the connection between innovation and firm performance is empirically inconclusive, partially owing to the limitations of existing innovation measures, which tend to ignore the effectiveness of innovation programs. In this study, we use the winning of innovation awards as a proxy for the effective implementation of innovation. Based on data from more than 1,000 publicly traded firms that won innovation awards between 1998 and 2003, our statistical tests provide strong evidence that the performance of award-winning firms is significantly higher as compared to several sets of control firms.