The elixir (or burden) of youth? Exploring differences in innovation between start-ups and established firms

Despite the widely acknowledged role of start-ups in economic development, we still know little about their innovative activities compared with those of established firms. Drawing upon a large sample of UK firms, this paper uses a matching estimator approach to explore the disparity between start-ups and established firms in terms of their innovative performance. The paper demonstrates that start-ups do differ significantly from established firms in their innovation activities. We find that being a new firm increases the likelihood of innovating in terms of new products and organizational arrangements, whereas start-ups are no more likely than established firms to introduce new processes. We explore the implications of these findings for theory and future research.