Abstract
This paper examines the relationship between R&D investments, innovation and growth in high-technology SMEs during a period of economic downturn. We conduct a quantile regression analysis of longitudinal data collected on a panel of 460 high-technology SMEs over a 6 years period, to test the impact of different activities characterising firms’ innovation strategies (internal R&D investments, external knowledge sourcing through collaborative R&D and the introduction of new products to the market) over the distribution of firms’ growth. We show that the impact of R&D investments is considerably different over the distribution of growth for firms in the sample during a period of economic downturn. More specifically, two distinct profiles emerge. Younger, smaller and innovating companies still experience fast growth rates as a result of the introduction of new products to the market. Conversely, negative returns on R&D investments characterise slow-growing high-technology SMEs. In such cases, a balanced approach between internal R&D investments and collaborative R&D activities positively contributes to growth
References
Ahn, J. M., Mortara, L., & Minshall, T. (2017). Dynamic capabilities and economic crises: has openness enhanced a firm's performance in an economic downturn? Industrial and Corporate Change, 27(1), 49-63.
Cassiman, B., & Veugelers, R. (2006). In search of complementarity in innovation strategy: Internal R&D and external knowledge acquisition. Management Science 52(1): 68–82.
Catozzella, A., & Vivarelli, M. (2014). The catalysing role of in-house R&D in fostering complementarity among innovative inputs. Industry and Innovation, 21(3), 179-196.
Cao, Q., Gedajlovic, E., & Zhang, H. (2009). Unpacking Organizational Ambidexterity: Dimensions, Contingencies, and Synergistic Effects. Organization Science 20(4): 781–796.
Cefis, E. & Orsenigo, L. (2001). The persistence of innovative activities: A cross-countries and cross-sectors comparative analysis. Research Policy 30(7): 1139–1158
Cefis, E., & Ciccarelli, M. (2005). Profit differentials and innovation. Economics of Innovation and New Technology 14(1-2): 43–61.
Chen, J., Chen, Y., & Vanhaverbeke, W. (2011). The influence of scope, depth, and orientation of external technology sources on the innovative performance of Chinese firms. Technovation 31(8): 362–373.
Chesbrough, H. & Garman, A. R. (2009). Use open innovation to cope in a downturn. Harvard Business Review:1–9
Coad, A., & Rao, R. (2006). Innovation and Firm Growth in High-Tech Sectors: A Quantile Regression Approach. LEM working paper Series 2006/18
Cohen, W., & Levinthal, D. (1989). Innovation and learning: the two faces of R&D. The Economic Journal 99(397): 569–596.
Crépon, B., Duguet, E., & Mairesse, J. (1998). Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level. Economics of Innovation and New Technology 7(2): 115–158.
Dasgupta, P. (1986). The Theory of Technological Competition. In J. F. Stiglitz, E. Mathewson (Eds.), New Developments in Analysis of Market Structure International Conference Proceedings (:519–549). UK: Palgrave Macmillan.
Del Monte, A., & Papagni, E. (2003). R&D and the growth of firms: empirical analysis of a panel of Italian firms. Research Policy 32: 1003–1014.
Delmar, F., Davidsson, P., & Gartner, W. B. (2003). Arriving at the High Growth Firm. Journal of Business Venturing 18(2): 189–216.
Demirel, P., & Mazzucato, M. (2012). Innovation and Firm Growth: Is R&D Worth It? Industry & Innovation 19(1): 45–62.
Di Minin, A., F. Frattini & Piccaluga A. (2010) Fiat: open innovation in a downturn (1993–2003) California Management tReview 52(3): 132–159.
European Commission (2019) Towards the next Framework Programme for Research and Innovation: Enhanced European Innovation Council (EIC) pilot. European Commission Decision C(2019)1849 -18 March 2019
Freel, M. S. (2000). Do Small Innovating Firms Outperform Non-Innovators ? Small Business Economics 14: 195–210.
Golovko, E., & Valentini, G. (2011). Exploring the complementarity between innovation and export for SMEs’ growth. Journal of International Business Studies 42(3): 362–380.
Griliches, Z. (1990). Patent Statistics as Economic Indicators: A Survey. Journal of Economic Literature 28(4): 1661–1707.
Heunks, F. J. (1998). Innovation, Creativity and Success. Small Business Economics 10(3): 263–272.
Hölzl, W. (2009). Is the R&D behaviour of fast-growing SMEs different? Evidence from CIS III data for 16 countries. Small Business Economics 33(1): 59–75
Leadbeater, C., & Meadway, J. 2008. Attacking the Recession. How Innovation Can Fight the Downturn. NESTA Discussion Paper, (December 2008).
Lefebvre, É., Lefebvre, L. A., & Bourgault, M. (1998). R&D-Related Capabilities as Determinants of Export Performance. Small Business Economics 10(4): 365–377.
Malerba, F. (2005). Sectoral systems: How and why innovation differs across sectors. The Oxford Handbook of Innovation: 380–406.
Malerba, F., Orsenigo, L., & Peretto, P. (1997). Persistence of innovative activities, sectoral patterns of innovation and international technological specialization. International Journal of Industrial Organization 15(6): 801–826.
Mason, G., Bishop, K. & Robinson, C. (2009). Business Growth and Innovation. The wider impact of rapidly-growing firms in UK city-regions. NESTA Research Report, London, UK.
Muller, P., Julius, J., Herr, D., Kock, L., Peychena, V., & McKlemar, S. (2017). Annual Report on European SMES 2016/2017. Entrepreneurship and SMEs. European Commission, Internal Market, Industry.
Schneider, C. & Veugelers, R. (2010). On young highly innovative companies: Why they matter and how (not) to policy support them. Industrial and Corporate Change 19(4): 969–1007.
Tether, B., & Massini, S. (1998). Employment creation in small technological and design innovators in the UK during the 1980s. Small Business Economics 11(4): 353–370.
Veugelers, R. (2008). The Role of SMEs in Innovation in the EU: A Case for Policy Intervention? Review of Business and Economics LIII(3): 239–262.
Voigt, P., & Moncada-Paternò-Castello, P. 2009. The global economic and financial downturn: What does it imply for firms’ R&D strategies? IPTS Working Paper on Corporate R&D and Innovation, 12. http://ideas.repec.org/p/ipt/wpaper/200912.html, May 18, 2013.
Yasuda, T. (2005). Firm growth, size, age and behaviour in Japanese manufacturing. Small Business Economics 24: (1–15).
Copyright and licensing: The journal supports the principles contained in the Berlin Declaration on Open Access to scientific literature (2003), reiterated in the Italian CRUI Guidelines on Open Access journals. Copyright Notice: papers made open to the public are published under the CC BY--4.0 license.
Archiving : This journal uses the LOCKSS system to create an archiving system, which is distributed between participating libraries and enables them to search through the permanent archives of the journal for the purposes of conservation and restoration. All journal data and publications are also saved and stored directly on the platform