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Drivers and Effects of Internationalising Innovation by SMEs

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Author Info
Rammer, Christian
Schmiele, Anja
Abstract

This paper investigates the drivers and effects of the internationalisation of innovation activities in SMEs based on a large data set of German firms covering the period 2002-2007. We look at different stages of the innovation process (R&D, design, production and sales of new products, and implementation of new processes) and explore the role of internal resources, home market competition and innovationrelated location advantages for an SME's decision to engage in innovation activities abroad. By linking international innovation activities to firm growth in the home market we try to identify likely internationalisation effects at the firm level. The results show that export experience and experience in knowledge protection are highly important for international innovation activities of SMEs. Fierce home market competition turns out to be rather an obstacle than a driver. High innovation costs stimulate internationalisation of non-R&D innovation activities, and shortage of qualified labour expels production of new products. R&D activities abroad and exports of new products spur firm growth in the home market while there are no negative effects on home market growth from shifting production of new products abroad.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-035 [rev.].

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7442

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Related research
Keywords: Internationalisation of Innovation; Globalisation; SMEs; Effects of Innovation; Absorptive Capacities; Market Structure;

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Find related papers by JEL classification:
O32 - Economic Development, Technological Change, and Growth - - Technological Change - - - Management of Technological Innovation and R&D
O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives
L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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    Other versions:
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  13. Guellec, Dominique & Pottelsberghe de la Potterie, Bruno v., 2001. "The internationalisation of technology analysed with patent data," Research Policy, Elsevier, vol. 30(8), pages 1253-1266, October. [Downloadable!] (restricted)
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