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The innovation activities of small and medium-sized enterprises and their growth: quantile regression analysis and structural equation modeling

SooGeun Ahn (), Jeewhan Yoon () and YoungJun Kim ()
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SooGeun Ahn: Korea University
Jeewhan Yoon: Korea University
YoungJun Kim: Korea University

The Journal of Technology Transfer, 2018, vol. 43, issue 2, 316-342

Abstract: Abstract Using an augmented version of Gibrat’s law, we theorized the relationship between the innovation activities of small and medium-sized enterprises (SMEs) and their growth in sales, firm value, and research and development (R&D) investment in the following years. Based on 17 years of data from 598 SMEs in South Korea, this study examined the mediating role of sales growth and firm value growth in the relationship between innovation activities and R&D investment growth in a longitudinal setting. The study findings suggested that the innovation activities of SMEs at Time 1 influenced the sales growth of high-growth firms and high-tech sectors at Time 2 more positively than that of low-growth firms and low-tech sectors, and that SMEs consequently invested more in R&D at Time 3. However, the innovation activities of SMEs at Time 1 did not significantly affect their firm value growth at Time 2. Theoretical and managerial implications are discussed for scholars, managers, and policy makers.

Keywords: Innovation activities; Firm growth; R&D; Quantile regression; Small and medium-sized enterprises (search for similar items in EconPapers)
JEL-codes: O32 (search for similar items in EconPapers)
Date: 2018
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