The impact of R&D strategy and firm size on the returns to innovation

Mario Kafouros, Chengqi Wang and George Lodorfos

International Journal of Entrepreneurship and Small Business, 2009, vol. 8, issue 4, 550-566

Abstract: Using a firm-level dataset of manufacturing firms, this study examines the economic returns to R&D in the UK. It contributes to the literature of innovation by investigating two firm-specific characteristics (firm size and R&D strategy) that may influence what a company itself gets for its own research efforts (private returns to R&D). The findings indicate that, on average, the rate of return to R&D is 0.33. However, the results show that the economic payoff for larger firms as well as for organisations that followed an R&D-intensive strategy is significantly higher, allowing such firms to improve their corporate performance. In contrast, the analysis indicates that less R&D-intensive and smaller firms cannot successfully appropriate the economic benefits of industrial research. The implications of these findings for academic research and regional economic development are discussed.

Keywords: R&D strategy; returns to innovation; firm size; economic development; small business; entrepreneurship; research and development; manufacturing firms; regional development. (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijesbu:v:8:y:2009:i:4:p:550-566

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