ARE PRODUCT-INNOVATION AND PROCESS-INNOVATION INDEPENDENT OF EACH OTHER

This paper studies the relationship between product- and process-innovation. After discussing the determinants of product- and process-innovation, a simultaneous equation model is estimated. A positive impact of product-innovation on process-innovation can be proved, but no evidence for a reverse effect can be found. Coefficients of other variables explaining process-innovation are sensitive with respect to the inclusion of product-innovation. © 1990, Taylor & Francis Group, LLC. All rights reserved.