The Persistence of Innovative Activities. A Cross-Countries and Cross-Sectors Comparative Analysis

Abstract This paper examines the persistence of innovative activities at the firm level in a comparative perspective. A new data set is used composed of six panel data, one for each of the following countries: France, Germany, Italy, UK, Japan and the USA. For each country, we use data on patent applications to the European Patent Office in the period 1978–1993 by 1200–1400 manufacturing firms. Using a transition probability matrix (TPM) approach, we find evidence for the existence of persistence in innovative activities, although, it is not very high in the aggregate and it declines as time goes by. However, both great innovators and non-innovators have a high probability to remain in their state and persistent innovators originate a disproportionate share of innovative activities. In this sense, persistence in innovative activities is quite strong. These tendencies apply to all countries considered here, although, clear country-specific properties are observed. Moreover, there is heterogeneity also across industrial and size classification. Intersectoral differences are invariant across countries, suggesting that persistence is (at least partly) a technology-specific variable. Persistence tends to increase with firm size, but the relationship between firms’ size and persistence is strongly-country-specific and it is not a simple one.