Size, competition, and innovative activities: a developing world perspective
The impact of size and competition on firm-level innovative activities has obtained considerable attention in developed countries, but the focus is still lacking in developing world. This paper is an attempt to contribute in this direction by including 14 Latin American countries, and by using Enterprise Survey data of the World Bank. We consider both input and output innovation to observe the influence of firm size and of market concentration on innovative activities, and to interrogate the differences in influences of innovation determinants in different size classes and competition statuses. Our analysis reveals that employment increases the likelihood of R&D and product innovation, and its influence on R&D expenditures is positive but at less than proportionate rate. We find that product market competition increases the probability of both R&D decision and innovation output, but it has no influence on R&D intensity. We observe no relationship between R&D expenditures per employee and product innovation. Country and industry differences also contribute substantially towards firm-level R&D activities and product innovation. Moreover, large or small firms do no tend to be advantageous for employment and competition in order to influence R&D activities; however, for product innovation, competition is a more significant stimulus for large firms compared to small ones. Our results suggest that firms' R&D productivity is independent of size classes and competition environments. All of the determinants (of innovation) are jointly observed to have different effects, for large and small firms, as explanatory factors of both R&D intensity and product innovation, and for different competition environments only for product innovation.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (31) (0)43 3883875
Fax: (31) (0)43 3216518
Web page: http://www.merit.unu.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Braga, Helson & Willmore, Larry, 1991. "Technological Imports and Technological Effort: An Analysis of Their Determinants in Brazilian Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 421-32, June.
- Rebecca Henderson & Iain Cockburn, 1996.
"Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery,"
RAND Journal of Economics,
The RAND Corporation, vol. 27(1), pages 32-59, Spring.
- Rebecca Henderson & Iain Cockburn, . "Scale, Scope and Spillovers: The Determinants of Research Productivity in Drug Discovery," Working Papers ec25/94, Department of Economics, University of Lancaster.
- Lee, Chang-Yang & Sung, Taeyoon, 2005. "Schumpeter's legacy: A new perspective on the relationship between firm size and R&D," Research Policy, Elsevier, vol. 34(6), pages 914-931, August.
- Jose Miguel Benavente, 2006.
"The role of research and innovation in promoting productivity in chile,"
Economics of Innovation and New Technology,
Taylor & Francis Journals, vol. 15(4-5), pages 301-315.
- José Miguel Benavente, 2002. "The Role of Research and Innovation in Promoting Productivity in Chile," Working Papers wp200, University of Chile, Department of Economics.
- Rinaldo Evangelista & Valeria Mastrostefano, 2006. "Firm size, sectors and countries as sources of variety in innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(3), pages 247-270.
- Acs, Zoltan J & Audretsch, David B, 1987. "Innovation, Market Structure, and Firm Size," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 567-74, November.
- Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002.
"Competition and Innovation: An Inverted U Relationship,"
NBER Working Papers
9269, National Bureau of Economic Research, Inc.
- Philippe Aghion & Nick Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2005. "Competition and Innovation: An Inverted-U Relationship," The Quarterly Journal of Economics, MIT Press, vol. 120(2), pages 701-728, May.
- Howitt, Peter & Griffith, Rachel & Aghion, Philippe & Blundell, Richard & Bloom, Nick, 2005. "Competition and Innovation: An Inverted-U Relationship," Scholarly Articles 4481507, Harvard University Department of Economics.
- Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
- Tang, Jianmin, 2006. "Competition and innovation behaviour," Research Policy, Elsevier, vol. 35(1), pages 68-82, February.
- Audretsch, David B & Vivarelli, Marco, 1996. " Firms Size and R&D Spillovers: Evidence from Italy," Small Business Economics, Springer, vol. 8(3), pages 249-58, June.
- Bernhard Dachs & Bernd Ebersberger & Hans Lööf, 2008.
"The innovative performance of foreign-owned enterprises in small open economies,"
The Journal of Technology Transfer,
Springer, vol. 33(4), pages 393-406, August.
- Dachs, Bernhard & Ebersberger, Bernd & Lööf, Hans, 2007. "The Innovative Performance of Foreign-owned Enterprises in Small Open Economies," Working Paper Series in Economics and Institutions of Innovation 87, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Leiponen, Aija, 2005. "Skills and innovation," International Journal of Industrial Organization, Elsevier, vol. 23(5-6), pages 303-323, June.
- Cohen, Wesley M & Levin, Richard C & Mowery, David C, 1987. "Firm Size and R&D Intensity: A Re-examination," Journal of Industrial Economics, Wiley Blackwell, vol. 35(4), pages 543-65, June.
- Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-90, September.
- Soete, Luc L. G., 1979. "Firm size and inventive activity : The evidence reconsidered," European Economic Review, Elsevier, vol. 12(4), pages 319-340, October.
- Crespi, Gustavo & Zuniga, Pluvia, 2012.
"Innovation and Productivity: Evidence from Six Latin American Countries,"
Elsevier, vol. 40(2), pages 273-290.
- Gustavo Crespi & Pluvia Zuñiga, 2010. "Innovation and Productivity: Evidence from Six Latin American Countries," IDB Publications (Working Papers) 6875, Inter-American Development Bank.
- Gustavo Crespi & Pluvia Zuniga, 2010. "Innovation and Productivity - Evidence from Six Latin American Countries," Research Department Publications 4690, Inter-American Development Bank, Research Department.
- Holmstrom, Bengt, 1989. "Agency costs and innovation," Journal of Economic Behavior & Organization, Elsevier, vol. 12(3), pages 305-327, December.
- Subodh, Kandamuthan, 2002. "Market Concentration, Firm Size and Innovative Activity: A Firm-level Economic Analysis of Selected Indian Industries under Economic Liberalization," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Bodas Freitas, Isabel Maria & Clausen, Tommy & Fontana, Roberto & Verspagen, Bart, 2008.
"Formal and informal external linkages and firms' innovative strategies. A cross-country comparison,"
MERIT Working Papers
065, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
- Isabel Freitas & Tommy Clausen & Roberto Fontana & Bart Verspagen, 2011. "Formal and informal external linkages and firms’ innovative strategies. A cross-country comparison," Journal of Evolutionary Economics, Springer, vol. 21(1), pages 91-119, February.
- Isabel Maria Bodas Freitas & Tommy Clausen & Roberto Fontana & Bart Verspagen, 2008. "Formal and informal external linkages and firms' innovative strategies: A cross-country comparison," Working Papers on Innovation Studies 20081113, Centre for Technology, Innovation and Culture, University of Oslo.
- Kumar, Nagesh & Saqib, Mohammed, 1996. "Firm size, opportunities for adaptation and in-house R & D activity in developing countries: the case of Indian manufacturing," Research Policy, Elsevier, vol. 25(5), pages 713-722, August.
- Mark Rogers, 2004. "Networks, Firm Size and Innovation," Small Business Economics, Springer, vol. 22(2), pages 141-153, 03.
- Fagerberg, Jan & Srholec, Martin, 2008.
"National innovation systems, capabilities and economic development,"
Elsevier, vol. 37(9), pages 1417-1435, October.
- Jan Fagerberg & Martin Srholec, 2007. "National innovation systems, capabilities and economic development," Working Papers on Innovation Studies 20071024, Centre for Technology, Innovation and Culture, University of Oslo.
- Pla-Barber, José & Alegre, Joaquín, 2007. "Analysing the link between export intensity, innovation and firm size in a science-based industry," International Business Review, Elsevier, vol. 16(3), pages 275-293, June.
- Levin, Richard C & Cohen, Wesley M & Mowery, David C, 1985. "R&D Appropriability, Opportunity, and Market Structure: New Evidence on Some Schumpeterian Hypotheses," American Economic Review, American Economic Association, vol. 75(2), pages 20-24, May.
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009.
"Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises,"
IZA Discussion Papers
3962, Institute for the Study of Labor (IZA).
- de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009. "Innovative firms or innovative owners ? determinants of innovation in micro, small, and medium enterprises," Policy Research Working Paper Series 4934, The World Bank.
- Edwin Mansfield, 1963. "Size of Firm, Market Structure, and Innovation," Journal of Political Economy, University of Chicago Press, vol. 71, pages 556.
- Holmström, Bengt, 1989. "Agency Costs and Innovation," Working Paper Series 214, Research Institute of Industrial Economics.
- Pavitt, Keith & Robson, Michael & Townsend, Joe, 1987. "The Size Distribution of Innovating Firms in the UK: 1945-1983," Journal of Industrial Economics, Wiley Blackwell, vol. 35(3), pages 297-316, March.
When requesting a correction, please mention this item's handle: RePEc:unm:unumer:2011052. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten)
If references are entirely missing, you can add them using this form.