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Does R&D Protect Smes From The Hardness Of The Cycle? Evidence From Spanish Smes (1990-2009)

Author

Listed:
  • Dolores Añón Higón

    (Department of Applied Economics II and ERICES, Universitat de València)

  • Miguel Manjón

    (QURE-CREIP Department of Economics, Universitat Rovira i Virgili)

  • Juan A. Máñez

    (Department of Applied Economics II and ERICES, Universitat de València)

  • Juan A. Sanchis-Llopis

    (Department of Applied Economics II and ERICES, Universitat de València)

Abstract

This paper analyses whether undertaking R&D activities allows SMEs to attenuate the negative impact of recessions on productivity. In contrast to other studies we use a firm level indicator of the cycle based on firms’ own perceptions, while total factor productivity is obtained using a control function methodology in which we recognise the potential role that R&D experience might have in shaping future firms’ productivity. The analysis is performed using a representative sample of Spanish SMEs for the period 1990-2009. Results show both that R&D activities render positive productivity returns, and that performing R&D helps to alleviate the negative effects of downturns on productivity. Additionally, R&D seems to have a countercyclical effect upon SME’s productivity over the business cycle, as we find that SMEs R&D productivity premium in recessions doubles that of expansions.

Suggested Citation

  • Dolores Añón Higón & Miguel Manjón & Juan A. Máñez & Juan A. Sanchis-Llopis, 2014. "Does R&D Protect Smes From The Hardness Of The Cycle? Evidence From Spanish Smes (1990-2009)," Working Papers 1411, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:1411
    as

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    References listed on IDEAS

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    Cited by:

    1. Lechman, Ewa & Dominiak, Piotr, 2016. "Entrepreneurship vulnerability to business cycle. A new methodology for identification pro-cyclical and counter-cyclical patterns of entrepreneurial activity," MPRA Paper 68793, University Library of Munich, Germany.

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    Keywords

    TFP; business cycle; R&D;

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