How do new entrepreneurs innovate?

This paper analyses the determinants of product innovation in Italian\r\nyoung innovative companies (YICs) by looking at in-house and\r\nexternal R&D and at the acquisition of external technology in its\r\nembodied and disembodied components. A Tobit approach is applied\r\nto study jointly the occurrence of product innovation and the\r\nintensity of such innovation.\r\nResults provide evidence that in-house R&D is linked to product\r\ninnovation both in mature firms and YICs; however, YICs turn out to\r\nbe less in-house R&D-based and more dependent on external sources\r\nof knowledge. Moreover, other entrepreneurial attitudes such as the\r\nability to cooperate with other firms in producing innovation or the\r\ncapacity to develop significant organizational changes appear to be\r\nless important or even absent in Italian YICs. These results are\r\nsomehow worrying, since they show that Italian innovative\r\nentrepreneurs are mostly driven by routinized rather than creative\r\nstrategies.