Knowledge base combinations and firm growth

Markus Grillitsch, Torben Schubert and Martin Srholec

Research Policy, 2019, vol. 48, issue 1, 234-247

Abstract: The link between knowledge and firm growth has been a core topic in economics of innovation for a long time. However, despite strong theoretical arguments, empirical evidence remains inconclusive. One important reason for this conundrum may be the failure of standard indicators to capture firm innovation activities comprehensively. We contribute to overcoming this limitation by looking in the knowledge processes that drive variegated forms of innovation and aim thereby to establish a solid relationship with firm growth in more detail. Our arguments draw on the differentiated knowledge base approach, distinguishing between analytical, synthetic, and symbolic knowledge. We measure the three types of knowledge bases with detailed longitudinal linked-employer-employee micro-data from Sweden. Econometric findings based on a very large sample of small and medium-sized firms indicate significantly positive effects of the three knowledge types, and in particular combinations thereof, on firm growth. In addition, we show that not only high-growth but also slow-growth firms benefit immensely from the use of combinatory knowledge bases. We find evidence on a curvilinear relation between knowledge bases and growth of firms. Beyond certain thresholds increasing the knowledge bases further results in decreasing firm growth. Our results remain robust in a wide range of specifications and econometric models.

Keywords: Knowledge; Innovation; Firm growth; Micro data; Sweden (search for similar items in EconPapers)
JEL-codes: C33 D22 O12 O32 O33 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:respol:v:48:y:2019:i:1:p:234-247

DOI: 10.1016/j.respol.2018.08.009

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