Leo Brecht and Niklas Bayrle
The innovation efficiency of firms can be investigated with the help of various methods and data sets. The starting point of this study is an innovation efficiency score based on Data Envelopment Analysis. In general, it is interesting to determine which characteristics innovation-efficient and non-innovation-efficient firms show regarding investment activities in innovations. In addition, their characteristics in terms of firm performance and firm valuation are also of interest. The paper aims to identify the investment patterns of innovation-efficient firms in contrast to non-innovation-efficient ones. A period from 2007 to 2017 is considered to identify these characteristics. Innovation-efficient firms show superior performance in terms of valuation and financial indicators. Investing into innovation efficiency leads to a better future for firms: Innovation efficient firms stay ahead of their competitors due to their steady investment into innovation activities.
Innovation efficiency; investment patterns; times series; innovation capability; firm performance