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Firm size and Innovation in European Manufacturing

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  • Mario Pianta
  • Andrea Vaona

Abstract

The paper investigates the differences between small, medium-sized and large firms regarding their performance in the introduction of new products and processes. After a review of the relevant literature, two models are proposed and tested in search for different business strategies and innovation inputs connected to product and process innovations. The empirical analysis uses innovation survey (CIS 2) data at the industry level for 22 manufacturing sectors, broken down in three firm size classes, for eight European countries. Special attention is devoted to tackling the issues of possible endogeneity of the regressors and of unobserved sectoral heterogeneity. The results - strengthening the findings of previous studies - show that product and process innovations, though having some complementarities, are associated to different innovative inputs and strategies pursued by firms. Systematic differences also emerge between the behaviour of large firms and SMEs.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1284.

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Length: 21 pages
Date of creation: Jul 2006
Date of revision:
Handle: RePEc:kie:kieliw:1284

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Keywords: Product innovation; Process innovation; Firm size; Determinants of innovation; European industries;

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References

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  1. Cohen, Wesley M & Klepper, Steven, 1996. "A Reprise of Size and R&D," Economic Journal, Royal Economic Society, vol. 106(437), pages 925-51, July.
  2. E Berman & J Bound & Stephen Machin, 1997. "Implications of Skill-Biased Technological Change: International Evidence," CEP Discussion Papers dp0367, Centre for Economic Performance, LSE.
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  7. Tommaso Antonucci & Mario Pianta, 2002. "Employment Effects of Product and Process Innovation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 16(3), pages 295-307.
  8. Davis, Peter, 2002. "Estimating multi-way error components models with unbalanced data structures," Journal of Econometrics, Elsevier, vol. 106(1), pages 67-95, January.
  9. Acs, Zoltan J & Audretsch, David B, 1987. "Innovation, Market Structure, and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 567-74, November.
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  14. Bruno Crepon & Emmanuel Duguet & Jacques Mairessec, 1998. "Research, Innovation And Productivi[Ty: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
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Citations

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Cited by:
  1. Raquel Ortega-Argilés & Marco Vivarelli & Peter Voigt, 2009. "R&D in SMEs: a paradox?," Small Business Economics, Springer, vol. 33(1), pages 3-11, June.
  2. Antonio Revilla & Zulima Fernández, 2013. "Environmental Dynamism, Firm Size and the Economic Productivity of R&D," Industry and Innovation, Taylor & Francis Journals, vol. 20(6), pages 503-522, August.
  3. Antonelli Cristiano & Colombelli Alessandra, 2011. "Globalization and Directed Technological Change at the Firm Level. The European Evidencegrowth," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 201109, University of Turin.
  4. Mario Pianta & Andrea Vaona, 2007. "Innovation and Productivity in European Industries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(7), pages 485-499.
  5. Francesco Crespi & Mario Pianta, 2008. "New Processes and New Products in Europe and Italy," Rivista di Politica Economica, SIPI Spa, vol. 98(2), pages 119-146, March-Apr.
  6. Akçomakn Semih & Akdeve, Erdal & Findik, Derya, 2013. "How do ICT firms in Turkey manage innovation? Diversity in expertise versus diversity in markets," MERIT Working Papers 024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Antonelli, Cristiano & Scellato, Giuseppe, 2009. "The Localized Introduction Of Biased Technological Change And Productivity Growth. The Empirical Evidence In The Italian Manufacturing Industry," Department of Economics and Statistics Cognetti de Martiis LEI & BRICK - Laboratory of Economics of Innovation "Franco Momigliano", Bureau of Research in Innovation, Complexity and Knowledge, Collegio 200908, University of Turin.
  8. Antonio Musolesi & Jean-Pierre Huiban, 2010. "Innovation and productivity in knowledge intensive business services," Journal of Productivity Analysis, Springer, vol. 34(1), pages 63-81, August.
  9. Hyunbae Chun & Sung-Bae Mun, 2012. "Determinants of R&D Cooperation in Small and Medium-Sized Enterprises," Working Papers 1204, Research Institute for Market Economy, Sogang University.
  10. Natário, Maria Manuela & Almeida Couto, João Pedro & Couto de Sousa, Maura Helena, 2012. "Innovation Processes of SMEs in Less Favoured Municipalities of Portugal," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 22, pages 81-103.
  11. Torben Klarl, 2013. "Consumer's Environmental Awareness and the Role of (Green) Entrepreneurship: Lessons from Environmental Quality Competition and R&D Activities for Environmental Policy," Discussion Paper Series 321, Universitaet Augsburg, Institute for Economics.
  12. Francesco Crespi & Mario Pianta, 2008. "Diversity in innovation and productivity in Europe," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 529-545, August.
  13. Akçomakn Semih & Akdeve, Erdal & Findik, Derya, 2013. "How do ICT firms in Turkey manage innovation? Diversity in expertise versus diversity in markets," MERIT Working Papers 024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  14. Czarnitzki, Dirk & Delanote, Julie, 2012. "Young innovative companies: The new high-growth firms?," ZEW Discussion Papers 12-030, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  15. Romero, Isidoro & Martínez-Román, Juan A., 2012. "Self-employment and innovation. Exploring the determinants of innovative behavior in small businesses," Research Policy, Elsevier, vol. 41(1), pages 178-189.
  16. Cristiano Antonelli & Francesco Quatraro, 2014. "The Effects of Biased Technological Changes on Total Factor Productivity: A Rejoinder and New Empirical Evidence," GREDEG Working Papers 2014-01, Groupe de REcherche en Droit, Économie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  17. H. T. Tran & E. Santarelli, 2013. "Revisiting Italian Emigration Before the Great War: A Test of the Standard Economic Model," Working Papers wp909, Dipartimento Scienze Economiche, Universita' di Bologna.
  18. Hervas-Oliver, Jose-Luis & Sempere-Ripoll, Francisca & Boronat-Moll, Carles, 2012. "Process innovation objectives and management complementarities: patterns, drivers, co-adoption and performance effects," MERIT Working Papers 051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  19. Hervas-Oliver, Jose-Luis & Sempere-Ripoll, Francisca & Boronat-Moll, Carles, 2012. "Process innovation objectives and management complementarities: patterns, drivers, co-adoption and performance effects," MERIT Working Papers 051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  20. Klarl, Torben, 2013. "Consumer's Environmental Awareness and the Role of (Green) Entrepreneurship: Lessons from Environmental Quality Competition and R&D Activities for Environmental Policy," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79729, Verein für Socialpolitik / German Economic Association.

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