Persistent product innovation boosts firm performance, driving economic growth.
This study looked at how innovation impacts a company's success from 1998 to 2008. They found that firms that consistently innovate their products and focus on marketing tend to be more profitable. However, the increase in productivity from investing in research and development is not as significant as expected. In contrast, having more capital compared to labor has a bigger impact on productivity. This suggests that Italian manufacturing firms may need to invest more in knowledge to grow in the future.