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Market versus Corporate Structure in Plant-Level Innovation Performance

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Author Info
 Love, James H
Ashcroft, Brian

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Abstract

This paper examines the effect which market and corporate structure have on the extent of innovation for a sample of circa 300 manufacturing plants located in Scotland. Innovation is defined as the introduction of a commercially significant new product at the establishment level. The theoretical model of Geroski (1990) is extended to incorporate plant-level variables such as size, multiplant operation, the presence of R&D facilities and external/indigenous ownership. A distinction is made between the direct and indirect effects of these variables. Negative binomial estimations indicate that corporate structure influences are more important in determining the number of innovations than market structure and barrier to entry variables. Plant size, foreign ownership and the presence of R&D are all positively associated with innovation. Direct effects greatly outweigh indirect effects. Tobit estimations on the number of innovations per employee support the findings of Acs and Audretsch (1988) that smaller enterprises are more innovation intensive than larger enterprises, at least up to a limit of around 1,200 employees. The positive effect of R&D arises principally from increasing the probability of a plant becoming an innovator, rather than from making a plant more innovation intensive. By contrast, the importance of size lies principally in encouraging further innovations among plants which are already innovators, but less than proportionately with the increase in employment size. Copyright 1999 by Kluwer Academic Publishers

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Publisher Info
Article provided by Springer in its journal Small Business Economics.

Volume (Year): 13 (1999)
Issue (Month): 2 (September)
Pages: 97-109
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Handle: RePEc:kap:sbusec:v:13:y:1999:i:2:p:97-109

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  1. C. Praag & Peter Versloot, 2007. "What is the value of entrepreneurship? A review of recent research," Small Business Economics, Springer, vol. 29(4), pages 351-382, December. [Downloadable!] (restricted)
    Other versions:
  2. Love, J. & Roper, S., 1999. "Location and Network Effects on Innovation Success: Evidence for UK, German and Irish Manufacturing Plants," Working Papers NIERC. 44, Economic Research Institute of Northern Ireland. [Downloadable!]
    Other versions:
  3. Andrea Vaona & Mario Pianta, 2008. "Firm Size and Innovation in European Manufacturing," Small Business Economics, Springer, vol. 30(3), pages 283-299, March. [Downloadable!] (restricted)
    Other versions:
  4. James H. Love & Stephen Roper & Jun Du, 2007. "Innovation, Ownership and Profitability," DRUID Working Papers 07-10, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies. [Downloadable!]
    Other versions:
  5. Love, James H. & Roper, Stephen, 2000. "Location And Network Effects On Innovation Success: Evidence For Uk, German And Irish Manufacturing Firms," ERSA conference papers ersa00p67, European Regional Science Association. [Downloadable!]
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