Firm Level Innovation and Productivity- Is there a Common Story Across Countries?

Bettina Peters, ZEW, Mannheim, Germany

Recent studies have documented extensive heterogeneity in firm performance within
countries: Innovation has found to be an important determinant. This paper addresses the
issue of innovation firm performance across countries. A growing number of national firm
level studies on the innovation-productivity link have been conducted using new
internationally harmonized survey data (CIS). However, cross-country comparisons of firm
data are rare. The contribution of this paper is its unique approach of pooling original data
from Germany and Sweden. Applying a knowledge production function that gives the
relationship between innovation and productivity, we find a common cross-country story for
knowledge intensive manufacturing firms.

Date: 08 April-00 0000