Innovation and Productivity in SMEs: Empirical Evidence for Italy

Bronwyn Hall, Francesca Lotti and Jacques Mairesse

No 14594, NBER Working Papers from National Bureau of Economic Research, Inc

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: in the first, R&D intensity is linked to a set of firm and market characteristics. 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.

JEL-codes: D24 L25 L26 O30 O32 (search for similar items in EconPapers)
Date: 2008-12
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-ino, nep-knm, nep-mic and nep-tid
Note: IO PR
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Citations: View citations in EconPapers (12)

Published as Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, vol. 33(1), pages 13-33, June.

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Journal Article: Innovation and productivity in SMEs: empirical evidence for Italy (2009)
Working Paper: Innovation and productivity in SMEs. Empirical evidence for Italy (2009)
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