Experience, Innovation and Productivity - Empirical Evidence from Italy's Slowdown



Ho: mean(out) - mean(in) = diff = 0

Ha: diff < 0

Ha: diff ≠ 0

Ha: diff > 0

t = 3.3795

t = 3.3795

t = 3.3795

P < t = 0.9996

P > |t| = 0.0007

P > t = 0.0004

Finally, we run an association tests to check for independence between being an innovative firm and
being in or out of sample, to evaluate whether less innovative firms are those kicked out of the final
panel. The Pearson chi-square tests are listed for different types of innovation activity:

R&D expenditures in 2001-2003 (yes/no)

Pearson chi-square(1) = 3.52 p-value = 0.061

Introducing product innovations (yes/no)

Pearson chi-square(1) = 7.194 p-value = 0.007

Introducing process innovations (yes/no)

Pearson chi-square(1) = 2.189 p-value = 0.139

Introducing both process and product

innovations (yes/no)

Pearson chi-square(1) = 2.249 p-value = 0.134

We reject the hypothesis of independence for R&D expenditure and product innovation only. That
means that firms investing into R&D and introducing product innovations have a (slightly) higher
probability to survive. We cannot reject the null for process innovations or both kinds of
innovations, instead. Introducing process innovations or not provide a firm equal probability to
remain in our sample.

31



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