Exploring the Link between Innovation and Firm Performance

In the context of this paper, we examine the relationship between innovation and firm performance for Greece. We test the hypothesis that there is a U-shaped relationship between innovation and firm performance, in the short-term period. We apply the method for examining nonlinearities, that is, the introduction of squared terms as independent variables. The collected variables are used in a multiple linear model formulation to evaluate the relative performance associated with them. For this reason, a number of variables are used, like the innovation intensity, the squared term of innovation intensity, the R&D personnel, and the productivity, as well as the firm size as control variable. We rely on the final results of a research project on women in innovation, technology, and science, based on 372 questionnaires selected on a 2-year time period (2004–2006). © 2013, Springer Science+Business Media New York.