Research Policy 30 (2001) 1139–1158 The persistence of innovative activities A cross-countries and cross-sectors comparative analysis Elena Cefis a , Luigi Orsenigo b,∗ a Department of Economics, University of Bergamo, Bergamo, Italy b Department of Economics and CESPRI, Bocconi University, Milan, Italy Received 16 February 2000; received in revised form 28 April 2000; accepted 26 September 2000 Abstract This paper examines the persistence of innovative activities at the firm level in a comparative perspective. A new data set is used composed of six panel data, one for each of the following countries: France, Germany, Italy, UK, Japan and the USA. For each country, we use data on patent applications to the European Patent Office in the period 1978–1993 by 1200–1400 manufacturing firms. Using a transition probability matrix (TPM) approach, we find evidence for the existence of persistence in innovative activities, although, it is not very high in the aggregate and it declines as time goes by. However, both great innovators and non-innovators have a high probability to remain in their state and persistent innovators originate a disproportionate share of innovative activities. In this sense, persistence in innovative activities is quite strong. These tendencies apply to all countries considered here, although, clear country-specific properties are observed. Moreover, there is heterogeneity also across industrial and size classification. Intersectoral differences are invariant across countries, suggesting that persistence is (at least partly) a technology-specific variable. Persistence tends to increase with firm size, but the relationship between firms’ size and persistence is strongly-country-specific and it is not a simple one. © 2001 Elsevier Science B.V. All rights reserved. JEL classification: O31; D21 Keywords: Innovation; Persistence; Transition probability matrices 1. Introduction In this paper, we ask whether innovative activities are persistent at the firm level. To this task, we use data on patent applications to the European Patent Office over the period 1978–1993 for six samples of firms in the following countries: France, Germany, Italy, Japan, UK and the USA. ∗ Corresponding author. Tel.: +39-2-5836-5430; fax: +39-2-5836-5430. E-mail address: luigi.orsenigo@uni-bocconi.it (L. Orsenigo). The issue of persistence in innovative activities is relevant in the context of the discussion about the properties of the patterns of innovative activities. The absence of persistence is likely to be associ- ated to “creative destruction” (or Schumpeter Mark I model), whereas, the existence of significant degrees of persistence would contribute to generate processes of “creative accumulation” (or Schumpeter Mark II model). A fortiori persistence in innovative activities may bear significant implications for both theory and policy-making. The observation of persistence would lend some support to the “competence-based” theories of the 0048-7333/01/$ – see front matter © 2001 Elsevier Science B.V. All rights reserved. PII:S0048-7333(00)00139-6