We build a model of firm-level innovation, productivity growth and reallocation featuring endogenous entry and exit. A …

Using novel data on European firms, this paper examines the effect of business group affiliation on innovation. We find … that business groups foster the scale and novelty of corporate innovation. Group affiliation is particularly important in … industries that rely more on external finance and have a higher degree of information asymmetry. We also find that the innovation …

innovation. Unlike previous literature based on survey data, we exploit the observed pattern of contributions - the .revealed …