Innovation and productivity in SMEs: empirical evidence for Italy

Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation that incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the “Survey on Manufacturing Firms” conducted by Mediocredito-Capitalia covering the period 1995–2003. The model is estimated in steps, following the logic of firms’ decisions and outcomes. We find that international competition fosters R&D intensity, especially for high-tech firms. Firm size and R&D intensity, along with investment in equipment, enhances the likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm’s productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive.

Essential research in technology management

Now that we live in a world full of cutting-edge breakthroughs, technology management seems to be particularly essential. The Journal of Business Research has published a special issue entitled “Essential Research in Technology Management.” This special issue includes 11 papers. Six of them are from the 2007 Chinese Society for Management of Technology Annual Meeting and Conference held at Feng Chia University, Taiwan, while the other five are invited. All of them went through double-blind reviews and revisions. These papers contribute to various perspectives of technology management in different countries.     

Measuring Innovation in European Industry

This paper analyses the results of the 1993 Community Innovation Survey (CIS). Fifty per cent of European firms introduced a product or process innovation during 1990-92. The share of innovating firms varies between industrial sectors and firm size. The percentage of innovating firms is higher for large firms than for smaller ones. In high-tech sectors this share is two thirds and for traditional ones is one third. The largest part of firms' expenditure for innovation is linked to the adoption and diffusion of technologies through machinery and equipment, which absorbs 50% of firms' innovation expenditure. R&D activities represent, on average, 20% of total innovation expenditure while other innovative activities, such as design and trial production, account respectively for 10% and 11%. The mix of innovation inputs, especially R&D and investment, is strongly correlated with firm size, displays little change across countries and varies greatly across industries.     

External and internal influences on R&D alliance formation: Evidence from German SMEs

Relying on relational capital theory and transaction cost economics (TCE), this study identifies factors that impede or promote alliance formation in small to medium-sized enterprises (SMEs). Environmental uncertainty and knowledge intensity impede firms' R&D alliance formation; the focal firm's overall trust in partners enhances alliance formation. Trust interacts positively with environmental uncertainty and knowledge intensity to affect alliance formation in SMEs. The findings reflect data from a longitudinal sample of 854 German SMEs, captured over eight years from 1999 to 2007.     

R&;D in SMEs: a paradox?

This paper has three objectives: (1) to survey the relevant literature addressing the (apparent) paradox of Research & Development investments carried out within Small and Medium Enterprises; (2) to provide focused summaries of the articles in this special issue; (3) to draw some general conclusions in terms of policy implications.

Innovation, R&D cooperation and labor recruitment: evidence from Finland

This article investigates the role played by one type of firm interaction, namely R&D cooperation, and also the acquisition of labor, in the promotion of industrial innovations. We employ a unique innovation dataset from Finland which combines firm specific information about the innovation performance of the firms along with their individual characteristics, as well as firm specific information regarding the origins of their recent labor acquisitions. Analyzing this data allows us to identify the different roles which the knowledge spillovers and labor markets play in the innovation process. Our results suggest that small firms are generally more innovative than large firms; R&D cooperation is an essential feature of innovation, but the variety of cooperation is of little importance; and labor acquisition appears to be only of limited importance for innovation.

Objects and Subjects in Technological Interdependence. Towards a Framework to Monitor Innovation

Technology, even more than other aspects of economic life, is characterized by a strong interdependence across both sectors and organizations. However, we still know little about the determinants and impact of technological interdependence. The standard input-output analysis is unable to explain interdependence in technological life since a large proportion of innovations are either untraded or are disembodied from products. Innovations which are not appropriated by the innovators are not signalled by prices. Moreover, input-output tables do not systematically consider exchanges within economic organizations, such as firms. This paper proposes a more complex accounting framework for innovation which would monitor the technological field of the innovation and the product where it is used, as well as the producer-user interrelationship.     

Merger and Innovation Incentives in a Differentiated Industry

This paper considers a duopoly with product differentiation and examines the interaction between merger and innovation incentives. The analysis reveals that a merger tends to discourage innovation, unless the investment cost is sufficiently low. This result holds irrespective of whether side payments between firms are allowed. When side payments between insiders within the merged firm are permitted, a standard result in the literature is reconfirmed, which suggests that a bilateral merger-to-monopoly is always profitable. When such side payments are not permitted, however, it is shown that a merger is not profitable when the efficiency of the new technology is relatively high and the investment cost is below a particular level.     

Internationally leading SMEs vs. internationalized SMEs: Evidence of success factors from South Korea

Previous studies on the internationalization of small and medium-sized enterprises (SMEs) have typically compared the performance of internationalized SMEs (I-SMEs) with that of non-internationalized SMEs. However, not all I-SMEs can successfully lead the international market either unless they should consistently strive to attain and maintain competitive advantages. Thus, this study aims at identifying success factors which influence efforts of I-SMEs to lead international markets as internationally leading SMEs (IL-SMEs). To examine the success factors of the IL-SMEs, in this paper, IL-SMEs are specifically defined as I-SMEs which occupy dominant positions in the international market, i.e., ranking among the top three worldwide. The results based on a sample of 88 South Korean SMEs including 18 IL-SMEs and 70 I-SMEs indicate that 18 factors (out of 47 factors) show significant differences between IL-SEMs and I-SMEs in terms of customer relations/service, technological innovation, and corporate strategies. Also, by factor analysis and logistic regression analysis, three factors influencing the success of IL-SMEs are identified in the perspectives of technological innovation (R&D) and international marketing (customer satisfaction and demand quality/scope). Surprisingly, internationalization strategies and external markets have no relationship with performance of IL-SMEs. These results provide important implications to policy-makers interested in the sustainably international competitiveness of SMEs.     

Introduction. The Internationalisation of the Innovation Process

The international economics of business and management has focused - both in the academic literature and in corporate and public policy discussions - increasingly on issues of globalisation, innovation and 'competitiveness'. These issues, and in particular their interrelation, are analysed in detail in this Special Issue of the International Journal of the Economics of Business. This opening article aims to set the scene by considering how the rather distinct literatures around the above three topics can best be drawn upon in order to focus on what implications the new global economic environment has for the economics of business and public policy.     

Whither Foreign R&D in China: Some Concluding Thoughts on Chinese Innovation

The purpose of this article is to highlight the impact of a new range of field-work driven scholarly research regarding foreign R&D in China on the field of Chinese innovation studies. The field of China innovation studies is positioned for a major take-off with the opening up and broadening of the field to a new generation of scholars and experts, including the growing participation and contributions of Chinese nationals from the People's Republic of China (PRC). With the continued opening of China to the outside world has come also increased scholarly access which is allowing for research on issues that heretofore was constrained due to the limited availability of information as well as political and national security sensitivities. The field also is benefiting from the increased visibility being given to innovation matters by the Chinese government and the rise in the number of foreign R&D centres that have been established by foreign companies. New ‘internally-focused’ questions related to R&D spending, the cultural and historical setting for innovation, and the institutional structure are being addressed with some promising results. In addition, a whole new series of ‘externally-focused’ questions also are beginning to dominate the research agenda as more and more foreign firms seek to take advantage of China's improved climate for overseas business as well as the growing number of scientists and engineers at the higher end of the Chinese talent pool. The more we seem to find out, however, the more we realize we need to know to truly understand China's technological potential. That said, it is increasingly clear that foreign influence is having an important shaping effect on the nature of the PRC's R&D system, especially with respect to the strategic role played or potentially being played by returned scholars and experts whose more cosmopolitan perspectives serve as a real asset in building bridges between Chinese traditional attitudes and modes of behaviour towards new knowledge creation and the current institutional constraints on China's innovation trajectory since 1949.     

Innovation Capability and Performance Of Manufacturing SMEs: The Paradoxical Effect of IT Integration

In theory, IT integration through applications such as enterprise resource planning, manufacturing resource planning, and electronic data interchange provides an organization with the ability to exploit innovation capabilities. Based on survey data obtained from 309 Canadian manufacturing small and medium-sized enterprises (SMEs), this study aims to identify the enabling effect of IT integration on the innovation capability of manufacturing SMEs—in terms of growth and productivity outcomes—and to verify if this effect is subject to industry influences. While the firm's innovation capability was found, as expected, to be positively related to the growth and productivity of manufacturing SMEs, the results underline paradoxical effects of IT integration in this regard. While IT integration was not seen to enable the innovation capability of manufacturing SMEs in terms of growth, it was seen to have a disabling effect on this same capability with regard to productivity.     

我国中小企业财务管理现状分析与对策研究

中小企业是国民经济重要组成部分其财务有其自身独特性.本文在分析中小企业财务管理问题的现状的基础上,提出加强其管理的相关对策.     

Critical success factors in project management: implication from Vietnam

This study will assess successful project performance based on key project factors. The indicators of project success are cost, time, technical performance and customer satisfaction as used in previous studies. The sample consisted of 239 project members and managers currently involved in infrastructure projects in Vietnam. Regression analysis was used to test five hypotheses developed from theories on project success. Three groups of factors including manager competencies, member competencies and external stability have significant positive relationships to the success criteria. The completion and implementation stages in the project life cycle are also positively related to success. The implementation stage of a project moderates both the effects of external stability and organization support on success. The implication for project managers is that implementation is the key stage in determining the success of projects.     

The Evolution of R&D Laboratories in the Brazilian Polymer Industry

ABSTRACT

Ronstadt observed that R&D laboratories in foreign subidiaries of American multinationals follow an evolutionary pattern of development. First, these laboratories adapt foreign technology to the local conditions and local raw materials. Later, laboratories focus their activity in obtaining product quality. In the last stage, these R&D units generate new technology of a long-term or exploratory nature for the corporate parent. Based on this theoretical background, this paper studies the evolution of R&D investments in polymer firms in Brazil. The methodology used was a case study conducted in 5 firms from the polymer area, complemented with secondary sources.

RESUMEN. Según Ronstadt, los laboratorios de I&D de las subsidiarias extranjeras de las multinacionales norteamericanas, cumplen un programa de desarrollo evolucionario. En primer lugar, estos laboratorios adaptan las tecnologías extranjeras a las condiciones locales y las materias primas existentes. A continuación, los laboratorios orientan sus actividades en obtener un producto de alta calidad. En la última etapa, estas unidades de I&D generan nueva tecnología de características a largo plazo o naturaleza exploratoria para la corporación matriz. Usando como base estos antecedentes teóricos, este documento estudia la evolución de las inversiones realizadas por las empresas de polímeros en el campo de la I&D en el Brasil. La metodología utilizada fue un estudio de caso realizado en 5 empresas fabricantes de polímeros, complementado con otras fuentes secundarias.

RESUMO. Ronstadt observou que os laboratórios de R&D em subsidiárias estrangeiras de multinacionais americanas seguem um padrão evolutivo de desenvolvimento. Primeiro, estes laboratórios adaptam a tecnologia estrangeira às condiç[otilde]es e às matérias-primas locais. Posteriormente, os laboratórios focalizam a sua atividade na obtenção da qualidade do produto. E, finalmente, estas unidades de R&D geram uma nova tecnologia para a matriz de natureza exploratória ou de longo prazo. Baseado nesta experiência teórica, este trabalho investiga a evolução dos investimentos de R&D em empresas de polímeros no Brasil. A metodologia usada foi um estudo de caso conduzido em cinco empresas da área de polímeros, complementada por fontes secundárias.     

R&D spillovers through trade in a panel of OECD industries

This paper investigates the significance of Research and Development (R&D) spillovers through intra- and international trade in intermediate goods for productivity growth in a panel of OECD industries during 1973–1994. In the model, four different sources of R&D are identified: R&D conducted in the particular industry itself, R&D conducted in the same industries in other countries, R&D conducted in other domestic industries, and R&D conducted in other foreign industries. I find that among R&D sources the most important contributions to productivity growth come from the domestic R&D efforts. Here, own R&D is important for both domestic innovation and for the productivity catch-up process. Evidence that international R&D spillovers also have significant effects on productivity growth is found to be less robust. My analysis also shows that human capital affects productivity directly as a factor of production.     

The roles of R&;D in new firm growth

Innovative start-ups are an important driver of economic growth. This article presents empirical evidence on the effects of research and development (R&D) on new product development, interfirm alliances and employment growth during the early life course of firms. We use a dataset that contains a sample of new firms that is representative of the whole population of start-ups. This dataset covers the first 6 years of the life course of firms. It is revealed that R&D plays several roles during the early life course of high-tech as well as high-growth firms. The effect of initial R&D on high-tech firm growth is through increasing levels of interfirm alliances in the first post-entry years. R&D efforts enable the exploitation of external knowledge. Initial R&D also stimulates new product development later on in the life course of high-tech firms, but this does not seem to affect firm growth. R&D does not affect the growth rate of new low-tech firms, which seem to be driven mainly by the growth ambitions of the founding entrepreneur. The results show that R&D matters for a limited but important set of new high-tech and high-growth firms, which are key in innovation and entrepreneurship policies.

Mobility of public researchers, scientific knowledge transfer, and the firm's innovation process

The present study provides evidence on the mobility effects of researchers from the public R&D system with regard to firm's innovation process. This issue is particularly novel and important as these researchers contribute to the production and transfer of knowledge previously developed and accumulated in the public R&D system. The findings confirm that scientific knowledge which public researchers provide has a positive influence on both inputs and outputs of the firms' innovation process. The fact that firms have access to additional knowledge which is complementary to that they already hold represents a spur for exploiting and applying this new knowledge. The firms in this study continually increased their in-house R&D investments. As a result of these investments firms create new knowledge of a unique and valuable type. The study draws two important conclusions geared to providing a greater efficiency in human resource management and to improve the design of technology policies.     

International technology spillovers and innovation: Evidence from Taiwanese high-tech firms

This paper uses Taiwanese high-tech firms’ data from 2003 to 2007 to investigate the impacts of international technology spillovers and firms’ R&D activities on firms’ innovation performance. We also consider absorptive capability and examine whether the technology spillovers have different effect on firms' innovation performance. We choose patent application counts to measure firms' innovation performance, and adopt panel Ordinary Least Squares (OLS) with fixed-effect and random-effect models as well as System Generalized Method of Moments (GMM) model to estimate. The empirical findings indicate the innovation performance of high-tech firms is positively affected by their R&D efforts, export performance, and the presences of multinational corporations. Furthermore, when absorptive capacity is taken into account, the technology spillovers by exporting and technology import would affect the innovation performance more.