Are large innovative firms more efficient?
AbstractOne of the characteristics of the Spanish economy is the high percentage of small and medium-sized firms. Size is one of the factors that condition the managerial organization of the firms and their efficiency and productivity. Moreover size has been found a highly significant variable in explaining differences in firm’s innovative activities and the returns of R&D expenditures, and it is a well-established connection between productivity and innovative activities. This paper analyses the relationship between innovative activities and size and their effect over firms’ technical efficiency and then over their productivity. We also take into account other variables that could affect the relationship between productivity and innovative activities: industrial sector, market structure, or firms’ financial conditions. The analysis could help to design political economic measures to encourage small firms’ innovation and then contribute to improve their competitiveness. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier production function and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación SEPI. Our preliminary results show that innovative firms are more efficient than non-innovative firms; and that small and medium-sized firms’ tent to be more efficient than large firms are.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 44592.
Date of creation: 25 Feb 2013
Date of revision:
small firms; technical efficiency; innovative activities.;
Other versions of this item:
- Rosario SÁNCHEZ-PÉREZ & M. Ángeles DÍAZ-MAYANS, 2013. "Are Large Innovative Firms More Efficient?," Theoretical and Practical Research in Economic Fields, ASERS Publishing, ASERS Publishing, vol. 0(1), pages 89-96, July.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-16 (All new papers)
- NEP-COM-2013-03-16 (Industrial Competition)
- NEP-CSE-2013-03-16 (Economics of Strategic Management)
- NEP-EFF-2013-03-16 (Efficiency & Productivity)
- NEP-ENT-2013-03-16 (Entrepreneurship)
- NEP-INO-2013-03-16 (Innovation)
- NEP-SBM-2013-03-16 (Small Business Management)
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