The Relevance of Marketing in the Success of Innovations

Speaker
Abraham Garcia
Date
29/02/2016 - 12:30 - 11:00Add To Calendar 2016-02-29 11:00:00 2016-02-29 12:30:00 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). Building 504, Room 011 אוניברסיטת בר-אילן - Department of Economics Economics.Dept@mail.biu.ac.il Asia/Jerusalem public
Place
Building 504, Room 011
Affiliation
United Nations University -- Merit
Abstract

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).

Last Updated Date : 24/02/2016