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Innovation and firm performance

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Author Info

  • Jeroen de Jong
  • Ron Kemp
  • Mickey Folkeringa
  • Wubben

Abstract

In this paper, the current state of knowledge regarding the relation between innovation and firm performance is reviewed. The relationship is empirically tested. There is a special focus on small and medium-sized firms. In the literature, there is a trend towards a system approach. Empirical studies using this approach distinguish four parts in the innovation-performance relationship. First of all, a company decides whether or not to innovate. Secondly, if a company decides to innovate, what is the level of input in innovation. The innovative input will be transformed into innovative output. And finally, the innovative output will result in a better firm performance. In the model several feedback loops are incorporated, for instance, from firm performance to innovative input.

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File URL: http://www.entrepreneurship-sme.eu/pdf-ez/H200207.pdf
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Bibliographic Info

Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H200207.

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Length: 67 pages
Date of creation: 21 Jan 2003
Date of revision:
Handle: RePEc:eim:papers:h200207

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Cited by:
  1. Spyros Arvanitis & Thomas Bolli, 2009. "A Comparison of Firm-level Innovation Cooperation in Five European Countries," KOF Working papers 09-232, KOF Swiss Economic Institute, ETH Zurich.
  2. Mickey Folkeringa & Andre van Stel & Joris Meijaard, 2005. "Innovation, strategic renewal and its effect on small firm performance," Papers on Entrepreneurship, Growth and Public Policy 2005-36, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  3. Mohammad Movahedi & Olivier Gaussens, 2013. "Les effets de l’exportation sur l’innovation et la productivité : Analyse empirique sur un échantillon de PMI," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201307, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  4. Nebojša Stojcic & Heri Bezic, 2012. "Restructuring and Barriers: Cross-Country Evidence on the Competitiveness of Exporters in Transition," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(2 (Summer), pages 145-170.
  5. Rosenbusch, Nina & Brinckmann, Jan & Bausch, Andreas, 2011. "Is innovation always beneficial? A meta-analysis of the relationship between innovation and performance in SMEs," Journal of Business Venturing, Elsevier, vol. 26(4), pages 441-457, July.
  6. Gruian Claudiu-Marian, 2011. "Modern Factors That Enhance Company'S Financial Performance," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 169-175, December.

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