We study the impact of demand on innovation. By focusing on a sample of small- and medium-sized enterprises in several industries and European countries, we analyse how demand stimulates innovation by providing economic incentives and reducing uncertainty. Considering the size of the market as a...

Using patent data for four countries (Germany, France, United Kingdom, and Italy) for the period 1968-86, the authors find that the patterns of innovative activities differ systematically across technological classes, while remarkable similarities emerge across countries in the patterns of...