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EXTERNAL SUPPORT, INNOVATION AND ECONOMIC PERFORMANCE: WHAT FIRM LEVEL FACTORS MATTER FOR HIGH-TECH SMEs? HOW?

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  • M. H. Bala Subrahmanya

    (Department of Management Studies, Indian Institute of Science, Bangalore 560012, India)

Abstract

This paper probes the factors which determine or enable SMEs to acquire external support, to achieve technological innovation outputs (in the form of innovation sales) and to enhance economic performance (in the form of sales growth). At the outset a conceptual framework (based on literature survey) is formulated by identifying the key variables relevant to the research objectives. Subsequently based on primary data gathered from 157 innovative SMEs covering auto components, electronics and machine tool industries in the Bangalore city region of India, we analyzed the three objectives. By means of logistic regression analysis, we ascertained that SMEs which have internal technical competence in the form of technically qualified owner/manager and an exclusive design office, which innovate frequently, particularly focusing on both product and process innovations obtained external support relative to the rest. Backward elimination multiple regression analysis revealed that firms which are able to obtain and complement external support to their internal technical competence, and which are "entrepreneurial firms" achieved more innovation sales. Finally, backward elimination multiple regression analysis ascertained that innovation sales, objective of firm origin, age of firms and nature of innovations significantly influenced the sales growth of SMEs.

Suggested Citation

  • M. H. Bala Subrahmanya, 2013. "EXTERNAL SUPPORT, INNOVATION AND ECONOMIC PERFORMANCE: WHAT FIRM LEVEL FACTORS MATTER FOR HIGH-TECH SMEs? HOW?," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 17(05), pages 1-26.
    • Handle: RePEc:wsi:ijimxx:v:17:y:2013:i:05:n:s1363919613500242
    DOI: 10.1142/S1363919613500242
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    References listed on IDEAS

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    1. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    2. Solow, Robert M, 1988. "Growth Theory and After," American Economic Review, American Economic Association, vol. 78(3), pages 307-317, June.
    3. World Bank, 2010. "Innovation Policy : A Guide for Developing Countries," World Bank Publications - Books, The World Bank Group, number 2460, December.
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    Cited by:

    1. Deepak Chandrashekar & M. H. Bala Subrahmanya & Kshitija Joshi & Tathagat Priyadarshi, 2019. "Effect of Innovation on Firm Performance — The Case of a Technology Intensive Manufacturing Cluster in India," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(07), pages 1-31, November.
    2. Heredia Pérez, Jorge A. & Geldes, Cristian & Kunc, Martin H. & Flores, Alejandro, 2019. "New approach to the innovation process in emerging economies: The manufacturing sector case in Chile and Peru," Technovation, Elsevier, vol. 79(C), pages 35-55.
    3. Tatiana Marceda Bach & Luciano Luiz Dalazen & Wesley Vieira da Silva & Alex Antonio Ferraresi & Claudimar Pereira da Veiga, 2019. "Relationship Between Innovation and Performance in Private Companies: Systematic Literature Review," SAGE Open, , vol. 9(2), pages 21582440198, June.

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