The Relevance of Marketing in the Success of Innovations

This paper focuses on marketing expenditures and their relation with R&D investments and
innovative sales. A higher investment in R&D is associated with the production of a higher quality
or faster innovation, with a positive impact on sales and in a macro sense, an increase of GDP.
This paper raises the issue that good innovation need a strong marketing effort in order for this
innovation to have an impact on sales, it needs to be desired by consumers. This paper finds
empirical evidence that marketing expenditures explain a lot of the success of the innovation 0.5
to 0.7% (measured in terms of the elasticity of this effort to innovative sales), even more than the
flow of investment in R&D (which counts for 0.3 %). In fact, the size of the coefficient for
marketing doubles those found for R&D, a quite surprising result taking into consideration the
little importance that marketing has in innovation studies. The paper uses Community Innovation
Survey data, the third wave (CIS 3) and set up a system of simultaneous equations like in
Crepon et al. (1998).