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The determinants of R&D persistence in SMEs

Listed author(s):
  • Juan A. Máñez

    (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain)

  • María E. Rochina-Barrachina

    (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain)

  • Amparo Sanchis-Llopis

    (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain)

  • Juan A. Sanchis-Llopis

    (Universitat de València and ERI-CES, Departamento de Economía Aplicada II, Avda. dels Tarongers s/n, 46022 Valencia, Spain)

This paper analyses the sources of persistence in conducting R&D activities by SMEs. The data used is a panel of Spanish manufacturing firms drawn from the Survey of Business Strategies (ESEE), for the period 1990-2011. We estimate discrete time proportional hazard models accounting for firm observed and unobserved heterogeneity. Our results are consistent with a process of learning associated with the accumulation of R&D capital and with a self-sustained effect of engagement in R&D activities. In addition, we obtain that persistence in R&D in SMEs is also related to the success-breeds-success, sunk costs and demand-pull hypotheses. Finally, our findings also uncover some interesting differences in the underlying drivers of R&D persistence of SMEs as compared to their larger counterparts.

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File URL: ftp://147.156.210.157/RePEc/pdf/eec_1410.pdf
File Function: First version, 2014
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Paper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1410.

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Date of creation: Oct 2014
Handle: RePEc:eec:wpaper:1410
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