Par Rabeh Morrar
By using firm-level data provided by the 4th Community Innovation Survey (CIS4), this paper draws a comparison between service and manufacturing sectors with regard to innovation behavior and estimates also the relationship between innovation and economic performance in both sectors. The comparison shows that the service sector performs differently compared to the manufacturing sector for most of innovation behavior indicators. A significant positive relationship between innovation and economic performance is found in both manufacturing and service firms. In services, non-technological innovation has more a significant effect than technological innovation, whereas technological innovation has a more significant effect than non-technological innovation in manufacturing sectors. Also, the mix strategy of technological and non-technological innovation is the most efficient innovation strategy for economic growth in both manufacturing and service firms.
JEL codes: O31, O14, L10, L25, C50, C54