R&D, firm growth and the role of innovation persistence: an analysis of Finnish SMEs and large firms

Research output: Contribution to journalArticleScientificpeer-review

30 Citations (Scopus)

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 languageEnglish
Pages (from-to)767-785
Number of pages19
JournalSmall Business Economics
Volume43
Issue number4
DOIs
Publication statusPublished - 2014
MoE publication typeA1 Journal article-refereed

Fingerprint

Small and medium-sized enterprises
Large firms
Innovation
Firm growth
Persistence
Innovators
Sales growth
Firm-level data
Finnish firms
Small firms
Comovement
Lead-lag relationship
Interaction
Innovation activities
Vector autoregression model

Keywords

  • Finland
  • firm growth
  • innovation
  • panel VAR
  • R&D
  • SME

Cite this

@article{256744964d3144fe8b693c3a8111c709,
title = "R&D, firm growth and the role of innovation persistence: an analysis of Finnish SMEs and large firms",
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.",
keywords = "Finland, firm growth, innovation, panel VAR, R&D, SME",
author = "Matthias Deschryvere",
year = "2014",
doi = "10.1007/s11187-014-9559-3",
language = "English",
volume = "43",
pages = "767--785",
journal = "Small Business Economics",
issn = "0921-898X",
publisher = "Springer",
number = "4",

}

R&D, firm growth and the role of innovation persistence : an analysis of Finnish SMEs and large firms. / Deschryvere, Matthias.

In: Small Business Economics, Vol. 43, No. 4, 2014, p. 767-785.

Research output: Contribution to journalArticleScientificpeer-review

TY - JOUR

T1 - R&D, firm growth and the role of innovation persistence

T2 - an analysis of Finnish SMEs and large firms

AU - Deschryvere, Matthias

PY - 2014

Y1 - 2014

N2 - 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.

AB - 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.

KW - Finland

KW - firm growth

KW - innovation

KW - panel VAR

KW - R&D

KW - SME

U2 - 10.1007/s11187-014-9559-3

DO - 10.1007/s11187-014-9559-3

M3 - Article

VL - 43

SP - 767

EP - 785

JO - Small Business Economics

JF - Small Business Economics

SN - 0921-898X

IS - 4

ER -