Abstract
R&D investment and growth in SMEs and large firms relate in a complex way. This paper analyses what role persistence of innovation output plays in shaping that relationship. We apply a vector auto-regression model to Finnish firm-level data and summarize the lead-lag relationship and complex co-movements of R&D growth and firm growth series. We found only continuous product and process innovators to have positive associations between R&D growth and sales growth. Also the associations between sales growth and subsequent R&D growth were stronger for continuous innovators than for occasional innovators, but only for product innovators. In the case of process innovators it is the occasional innovators that exhibit a stronger association between sales growth and subsequent R&D growth. In addition, our results vary between large and small firms. We express the need for further research on innovation dynamics and growth of SMEs analysing the interactions between different innovation activities.
| Original language | English |
|---|---|
| Pages (from-to) | 767-785 |
| Number of pages | 19 |
| Journal | Small Business Economics |
| Volume | 43 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2014 |
| MoE publication type | A1 Journal article-refereed |
Keywords
- Finland
- firm growth
- innovation
- panel VAR
- R&D
- SME