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Routinization of innovation in German manufacturing: the David-Goliath symbiosis revisited

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  • Oliver Falck

Abstract

Small and medium-sized firms frequently are viewed as the drivers of radical innovation. However, they often do not have the focus and commitment necessary for improving and extending the innovation, tasks better accomplished by routinized large firms. Using a uniquely rich industry-level data set for German manufacturing industries during 1991-2004, this article finds evidence for this David-Goliath symbiosis. Although small and medium-sized firm innovation rates can explain the within-industry variation of productivity growth, it is the large firm process innovation rate that explains differences in the level of productivity growth between industries, i.e. differences in the degree of routinization of innovation. Copyright 2009 , Oxford University Press.

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  • Oliver Falck, 2009. "Routinization of innovation in German manufacturing: the David-Goliath symbiosis revisited," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 18(3), pages 497-506, June.
    • Handle: RePEc:oup:indcch:v:18:y:2009:i:3:p:497-506
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    Cited by:

    1. Oliver Falck & Stephan Heblich & Stefan Kipar, 2011. "Incumbent innovation and domestic entry," Small Business Economics, Springer, vol. 36(3), pages 271-279, April.
    2. Stefan Bauernschuster, 2013. "Dismissal protection and small firms’ hirings: evidence from a policy reform," Small Business Economics, Springer, vol. 40(2), pages 293-307, February.
    3. Jessica Birkholz & Jarina Kühn & Mariia Shkolnykova, 2022. "Exploration or Exploitation: Innovation Behavior of SMEs and Large Firms during the COVID-19 Crisis," Bremen Papers on Economics & Innovation 2203, University of Bremen, Faculty of Business Studies and Economics.
    4. Andersson, Martin & Xiao, Jing, 2014. "Acquisitions of Start-ups by Incumbent Businesses A market selection process of “high-quality” entrants?," Papers in Innovation Studies 2014/19, Lund University, CIRCLE - Centre for Innovation Research.
    5. Stefan Kipar, 2012. "Determinants of Firm Innovation - Evidence from German Panel Data," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 45, May.
    6. Andersson, Martin & Xiao, Jing, 2016. "Acquisitions of start-ups by incumbent businesses," Research Policy, Elsevier, vol. 45(1), pages 272-290.

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