DOES R&D PROTECT SMES FROM THE HARDNESS OF THE CYCLE? EVIDENCE FROM SPANISH SMES (1990-2009)

Dolores Añón Higón, Miguel Manjon Antolin, Juan A. Mañez and Juan A. Sanchis-Llopis
Additional contact information
Dolores Añón Higón: Department of Applied Economics II and ERICES, Universitat de València
Juan A. Sanchis-Llopis: Department of Applied Economics II and ERICES, Universitat de València
Authors registered in the RePEc Author Service: Juan A. Sanchis Llopis ()

No 1411, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: This paper analyses whether undertaking R&D activities allows SMEs to attenuate the negative impact of recessions on productivity. In contrast to other studies we use a firm level indicator of the cycle based on firms’ own perceptions, while total factor productivity is obtained using a control function methodology in which we recognise the potential role that R&D experience might have in shaping future firms’ productivity. The analysis is performed using a representative sample of Spanish SMEs for the period 1990-2009. Results show both that R&D activities render positive productivity returns, and that performing R&D helps to alleviate the negative effects of downturns on productivity. Additionally, R&D seems to have a countercyclical effect upon SME’s productivity over the business cycle, as we find that SMEs R&D productivity premium in recessions doubles that of expansions.

Keywords: TFP; business cycle; R&D (search for similar items in EconPapers)
Date: 2014-12
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ent, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://repecsrv.uv.es/paper/RePEc/pdf/eec_1411.pdf First version, 2014 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:1411

Access Statistics for this paper

More papers in Working Papers from Department of Applied Economics II, Universidad de Valencia Contact information at EDIRC.
Bibliographic data for series maintained by Vicente Esteve ().