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Firm growth and R&D: Evidence from the Portuguese manufacturing industry

Author

Listed:
  • Blandina Oliveira

    (Polytechnic Institute of Leiria
    University of Évora)

  • Adelino Fortunato

    (University of Coimbra)

Abstract

This work studies the effects of R&D activities and investment, both physical and R&D, on the growth of firms by considering a dynamic firm growth model with serial correlation. The main hypotheses maintain that firms with a strong commitment to R&D have a higher growth rate, and investment has a positive effect on firm growth. We investigate such relations with reference to an unbalanced panel data set of Portuguese manufacturing firms over the period of 1990 to 2001. We find that a systematic tendency for smaller firms to grow more quickly is the main reason why firm growth is not entirely stochastic.

Suggested Citation

  • Blandina Oliveira & Adelino Fortunato, 2017. "Firm growth and R&D: Evidence from the Portuguese manufacturing industry," Journal of Evolutionary Economics, Springer, vol. 27(3), pages 613-627, July.
    • Handle: RePEc:spr:joevec:v:27:y:2017:i:3:d:10.1007_s00191-016-0487-z
    DOI: 10.1007/s00191-016-0487-z
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    Cited by:

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    2. Diego F. Grijalva & Valeria Ayala & Paúl A. Ponce & Yelitza Pontón, 2018. "Does firm innovation lead to high growth? Evidence from Ecuadorian firms," Revista Cuadernos de Economia, Universidad Nacional de Colombia, FCE, CID, vol. 37(75), pages 697-726, May.
    3. Swati Agrawal & Poonam Singh & Mainak Mazumdar, 2021. "Innovation, Firm Size and Ownership: A Study of Firm Transition in India," International Journal of Global Business and Competitiveness, Springer, vol. 16(1), pages 15-27, June.
    4. A. Arrighetti & L. Cattani & F. Landini & A. Lasagni, 2019. "Work Flexibility and Firm Growth," Economics Department Working Papers 2019-EP04, Department of Economics, Parma University (Italy).
    5. Yao-Chin Lin & Chun-Liang Chen & Cheng-Fu Chao & Wei-Hung Chen & Henry Pandia, 2020. "The Study of Evaluation Index of Growth Evaluation of Science and Technological Innovation Micro-Enterprises," Sustainability, MDPI, vol. 12(15), pages 1-25, August.
    6. Alessandro Arrighetti & Fabio Landini & Andrea Lasagni, 2021. "Swimming upstream throughout the turmoil: Evidence on firm growth during the great recession," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(3), pages 322-344, July.

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    More about this item

    Keywords

    Firm growth; R&D; GMM system estimator;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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