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Firms size and directed technological change

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  • Cristiano Antonelli
  • Giuseppe Scellato

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Abstract

The analysis of the characteristics of firms helps to understand the causes and consequences of the direction of technological change. Firms differ substantially with respect to the type of technological knowledge they can generate and exploit through technological innovations. This in turn has major effects on the direction of technological change they are able to introduce. Large firms able to command the recombinant generation of codified knowledge with a strong scientific base are more likely to introduce neutral technological changes that consist in a shift effect of production functions. Small firms that rely more on tacit and external knowledge are more likely to rely on technologies directed toward the most intensive use of locally abundant production factors. The effects of this difference in terms of the resulting total factor productivity growth are important and can be grasped only when the changes in output elasticity of production factors in growth accounting are properly appreciated. The empirical evidence for a sample of 6,600 Italian firms observed between 1996 and 2005 confirms that large firms introduced mainly neutral technological changes while small firms with lower levels of profitability introduced biased technological changes. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Cristiano Antonelli & Giuseppe Scellato, 2015. "Firms size and directed technological change," Small Business Economics, Springer, vol. 44(1), pages 207-218, January.
  • Handle: RePEc:kap:sbusec:v:44:y:2015:i:1:p:207-218
    DOI: 10.1007/s11187-014-9593-1
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    References listed on IDEAS

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    2. repec:spr:anresc:v:62:y:2019:i:1:d:10.1007_s00168-018-0890-5 is not listed on IDEAS
    3. repec:ags:ifaamr:264195 is not listed on IDEAS
    4. Carlo Corradini & Pelin Demirel & Giuliana Battisti, 2016. "Technological diversification within UK’s small serial innovators," Small Business Economics, Springer, vol. 47(1), pages 163-177, June.
    5. repec:eee:tefoso:v:141:y:2019:i:c:p:59-65 is not listed on IDEAS
    6. repec:eee:tefoso:v:126:y:2018:i:c:p:186-193 is not listed on IDEAS
    7. Nuno Campos Pereira & Nuno Araújo & Leonardo Costa, 2016. "A counting multidimensional innovation index for SMEs," Working Papers de Economia (Economics Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.

    More about this item

    Keywords

    Directed technological change; Types of innovation processes; Size of firms; Growth accounting; O30; L26;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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