Get With the Program: Software-Driven Innovation in Traditional Manufacturing
NBER Working Paper No. 21752
Issued in November 2015, Revised in January 2016
NBER Program(s):International Trade and Investment Program, Productivity, Innovation, and Entrepreneurship Program
This paper documents the increasing importance of software for successful innovation in manufacturing sectors well beyond the traditional definition of electronics and information technology. Using panel data for 229 publicly listed firms from 18 countries across four manufacturing industries over the period 1981-2005, we find significant variation across firms in the software intensity of their innovative activity. Firms that exhibit a higher level of software intensity generate more patents per R&D dollar, and their investment in R&D is more highly valued by equity markets. We present evidence that geographic differences in the abundance of skilled software labor are an important factor in determining sample firms’ software intensity and performance.
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Document Object Identifier (DOI): 10.3386/w21752
Published: Get with the Program: Software-Driven Innovation in Traditional Manufacturing Lee G. Branstetter, Matej Drev, and Namho Kwon Management Science , Articles in Advance
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