The aim of this paper is to analyse the effects of knowledge management on the innovation success of firms in Germany. Using a matching procedure on data from the German Innovation Survey of 2003 ("Mannheim Innovation Panel"), we pair firms applying knowledge management with twin firms with similar characteristics not applying knowledge management. Our focus is on investigating the effects of knowledge management techniques on the economic success of firms with product and process innovations. The results of our matching analysis reveal that firms which apply knowledge management perform better in terms of higher-than-average shares of turnover with innovative products compared to their twins. We do not find a significant effect of knowledge management on the share of cost reductions with process innovation.Keywords: knowledge management, innovation, matching estimator JEL Codes: O32, L23, L25, M11 Non-technical summaryThe aim of this paper is to analyse the effects of knowledge management (KM) techniques on the economic success of German firms with product and process innovations.The importance of KM and its link to innovation activities is widely acknowledged.The value of KM in the knowledge intensive innovation process arises because, even though knowledge can be seen as a regular asset, raising traditional asset questions to management such as when, how much and what to invest in, it has some properties which require special attention. Knowledge is (1) often embedded in employees; (2) has features of a public good; and (3) can hardly be bought in the market. Therefore, innovating firms, which have high knowledge requirements, have a need for a sophisticated knowledge management, which pays attention to the special requirements for and the interactive dimensions of knowledge.There are various studies on the technological (ICT-based), human resource and social aspects of KM. Those studies focusing on innovation performance do so in a very general sense and very simple, indicator-type measures of innovative success. An approach that tries to measure the impact of KM on firms' success with innovations in quantitative terms is still missing, however. We make a first step towards filling this gap in the literature with this paper.Using a matching procedure on data from the German Innovation Survey of 2003 ("Mannheim Innovation Panel"), we pair innovative firms applying knowledge management with innovative twin firms with similar characteristics not applying knowledge management. Our main focus is on assessing the impact of KM measures that try to foster knowledge flows and idea exchange across departments within a given firm, e.g. joint development of innovation strategies or temporary exchange of personnel, on the economic success which firms achieve with innovative products and processes.The results of our matching analysis reveal that firms which apply knowledge management perform better in terms of higher-than-average shares of turnover with innovative products compared to their twins. We do not find a...

Purpose -The purpose of this paper is to uncover factors that influence a firm's decision to implement knowledge management practices. The focus is on knowledge management practices implemented to increase collaboration on innovation activities between actors within a firm.Design/methodology/approach -Empirical analysis (probit estimations) of survey data on over 1,500 innovative German firms from the Mannheim Innovation Panel of 2003.Findings -The paper finds that an innovation strategy targeted at consumers and continuous R&D activities are positively related to knowledge management usage by innovative German firms. In addition, more general characteristics like the size and the industry of a firm also influence the decision to use knowledge management.Research limitations/implications -Given data restrictions the paper only analyses the collaborative aspects of knowledge management in firms. Future research should also take into account knowledge transfer, creativity, storage efforts in firms and IT related aspects of knowledge management and investigate the determinants of and complementarities between all of these different techniques. The paper is limited in both the time period it analyses and regional scope. Further research is necessary to investigate whether the results also hold for other countries and other periods.Originality/value -The analysis in this paper contributes to the existing literature by investigating the determinants of firms' decisions to engage in knowledge management activities using a large-scale survey of firms from a variety of different industries. The data used grant a unique insight into the innovation activities of firms and knowledge management approaches connected to these activities.

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