Notice of Retraction Relationship between product innovation and firm growth — Evidence from large and mediun-sized industrial firms in Hubei of China

This paper presents the relationship between product innovation and firm growth based on the data with time series in the range 1990-2008, which were drawn from the survey of large and medium-sized industrial firms in Hubei of China. ADF and Phillips-Perron tests suggest that there appears to be integrated of order two in the measures of two variables. The result of cointegration test shows that there exists a long-run cointegration between product innovation and firm growth and Granger causality test indicates bidirectional causality, not unidirectional causality. It is concluded that, although there are feedbacks, the causation runs mainly from the firm growth to product innovation rather than the other way round.