Template-type: ReDIF-Paper 1.0
Author-Name: Antonelli, Cristiano 
Author-Email: cristiano.antonelli@unito.it
Author-Name: Scellato, Giuseppe
Author-Email: giuseppe.scellato @polito.it 
Author-Workplace-Name: University of Turin
Author-Workplace-Homepage: http://www.est.unito.it/
Title: Out of Equilibrium Profit and Innovation.
Abstract:Innovation is the result of intentional decision-making that takes place in out-of-equilibrium conditions.
The farther is profitability from the average and the deeper the out-of-equilibrium conditions. The farther away is
the firm from equilibrium and the stronger the likelihood for innovation to take place. The hypothesis of a 
U-relationship between levels of profitability and innovative activity, as measured by the rates of increase of 
total factor productivity, is articulated and tested. The evidence of a large sample of 7000 Italian firms in the 
years 1996-2005 confirms that a strong causal relation holds between the quadratic specification of profitability 
and the growth rates of total factor productivity. The results are robust to different approaches to evaluate
productivity growth rates.
Length: 35 pages
Creation-Date: 2008-07
File-URL:http://www.est.unito.it/do/home.pl/Download?doc=/allegati_wp/wp2008dip_l_b/4_wp_momigliano.pdf
File-Format: Application/PDF
Handle: RePEc:uto:labeco:200804