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The impact of R&D strategy and firm size on the returns to innovation

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  • Mario Kafouros
  • Chengqi Wang
  • George Lodorfos

Abstract

Using a firm-level dataset of manufacturing firms, this study examines the economic returns to R&D in the UK. It contributes to the literature of innovation by investigating two firm-specific characteristics (firm size and R&D strategy) that may influence what a company itself gets for its own research efforts (private returns to R&D). The findings indicate that, on average, the rate of return to R&D is 0.33. However, the results show that the economic payoff for larger firms as well as for organisations that followed an R&D-intensive strategy is significantly higher, allowing such firms to improve their corporate performance. In contrast, the analysis indicates that less R&D-intensive and smaller firms cannot successfully appropriate the economic benefits of industrial research. The implications of these findings for academic research and regional economic development are discussed.

Suggested Citation

  • Mario Kafouros & Chengqi Wang & George Lodorfos, 2009. "The impact of R&D strategy and firm size on the returns to innovation," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 8(4), pages 550-566.
    • Handle: RePEc:ids:ijesbu:v:8:y:2009:i:4:p:550-566
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    Cited by:

    1. Antonio Revilla & Zulima Fern�ndez, 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.
    2. Boying Li & Chun‐Ping Chang & Mingbo Zheng, 2021. "Assessment of innovation and foreign direct investment: An investigation of OECD countries," Pacific Economic Review, Wiley Blackwell, vol. 26(3), pages 392-403, August.

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