Embodied and disembodied technical change. A multi-factorial analysis of german firms

Disembodied and embodied technical progress (capital investment in innovative goods) seen to be clear-cut theoretical concepts in traditional economic theory. However, the innovative evolution of firms is describes as a quite complex phenomenon in positive economics. In this empirical approach, major determinants of innovation and their interrelation are analysed using regression and factorial analyses for 240 German firms. Apart from the analysis of patents and research and development expenditures, the appropriation of disembodied technical progress along with embodied progress is considered in order to get a concise picture of innovation. It is found that firms follow a distinctly different pattern in this respect, but the embodied and the disembodied parts of innovative sources cannot be measured by the usual proxies as is suggested in theory. Rather the innovative patterns can be derived from different arrays of indicators. Size and industry effects seem to the weak determinants in innovation as industry branches are quite heterogeneous. A proper distinction between disembodied and embodied change seems to be more important.