Innovation and productivity in SMEs. Empirical evidence for Italy

Bronwyn Hall, Francesca Lotti and Jacques Mairesse

No 718, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: 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 which 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, 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.

Keywords: R&D; innovation; productivity; SMEs; Italy (search for similar items in EconPapers)
JEL-codes: L60 O31 O33 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-bec, nep-com, nep-cse, nep-eec, nep-eff, nep-ent, nep-ino, nep-knm, nep-sbm and nep-tid
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Citations: View citations in EconPapers (287)

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Related works:
Journal Article: Innovation and productivity in SMEs: empirical evidence for Italy (2009)
Working Paper: Innovation and Productivity in SMEs: Empirical Evidence for Italy (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_718_09

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