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Where there is a will, there is a way? Assessing the impact of obstacles to innovation

2012; Oxford University Press; Volume: 22; Issue: 3 Linguagem: Inglês

10.1093/icc/dts027

1464-3650

Pierre Blanchard, Jean-Pierre Huiban, Antonio Musolesi, Patrick Sevestre,

Corporate Finance and Governance

The aim of this article is to assess the impact of obstacles to innovation on firms’ propensity to innovate. We show that distinguishing between firms that do not innovate because they do not intend to and firms that try but fail or give up because of insurmountable obstacles is key for properly measuring the impact of the barriers to innovation. Estimating an innovation production function on appropriately defined subsamples allows obtaining consistent results, i.e. a significant and negative impact of the obstacles to innovation on firms’ propensity to innovate. These results are robust to the definition of these subsamples, to the way “obstacles to innovation” are defined, as well as to the distinction between financial and nonfinancial obstacles.