Currents and sub-currents in innovation flows: Explaining innovativeness using new-product announcements

Wilfred Dolfsma*, Gerben van der Panne

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

15 Citations (Scopus)


The creation of new knowledge is a haphazard process: not every sector in an economy is equally involved. The effect of industry structure on innovativeness has been a focus of attention for a long time by both academics and policymakers. In a much quoted article, using unique data - new-product announcements - Acs and Audretsch [Acs, Z.J., Audretsch, D.B., 1988. Innovation in large and small firms: an empirical analysis. American Economic Review 78(4), 678-690] identified several characteristics of industry structure and their effects on innovativeness. By analyzing a new and more consciously compiled database, we re-examine their original claims. Our results largely support their findings: industry concentration and degree of unionization for instance hamper innovation; skilled labor promotes it. Our findings diverge in one significant respect from theirs: we suggest that the large firms do not contribute more to an industry's innovativeness than small firms. At the industry level, we find strong support for the Schumpeter Mark I perspective of creative destruction by small firms rather than creative accumulation by large firms. In addition, we show that less dedicated innovators prove more susceptible to firm-external industry factors than more committed innovators. An unfavorable competitive environment decreases the likelihood that less successful innovators will announce new products.

Original languageEnglish
Pages (from-to)1706-1716
Number of pages11
JournalResearch Policy
Issue number10
Publication statusPublished - 1 Dec 2008
Externally publishedYes


  • Innovation
  • Innovation sub-currents
  • New-product announcements
  • Schumpeter Mark I


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