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In this paper we empirically analyse the innovation returns to firms which engage in nanotechnology research. Using propensity score matching we match firms which engage in nanotechnology research with statistically similar firms which do not. This allows us to assess whether there is a difference in their respective innovative output. We note that firms which engage in nanotechnology research have higher levels of turnover derived from newly innovative goods and services than firms which do not engage in nanotechnology research after controlling for differences in R&D intensity, openness to external agents and other firm specific characteristics. This suggests that firms which engage in nanotechnology research may gain an innovation premium over similar firms which do not engage in this specific form of research. • This study analyses the returns to firms which engage in nanotechnology research. • Propensity score matching allows us match the nanotech researching firms with those who do not. • Nanotech researching firms derive higher innovation turnover from new goods and services. • Firms which engage in nanotechnology research may gain an innovation premium. [ABSTRACT FROM AUTHOR]