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Assessing the nonlinear nature of the effects of R&D intensity on growth of SMEs: a dynamic panel data approach

Paulo Nunes (), Zelia Serrasqueiro () and João Leitão ()

Journal of Evolutionary Economics, 2013, vol. 23, issue 1, 97-128

Abstract: Based on a sample of Portuguese SMEs for the period 1999–2006 and using two step estimation, namely probit regressions and dynamic estimators, this study makes two important contributions to the literature: (i) identification of a quadratic relationship between R&D intensity and SME growth that takes the form of a U, and so R&D intensity is a stimulating factor of SME growth for high levels of R&D intensity; being a restrictive factor of SME growth for low levels of R&D intensity; and (ii) the growth of SMEs seems to be dependent on the nonlinear effects associated with distinct levels of R&D intensity. The nonlinear effects identified suggest that Portuguese SMEs with high levels of R&D intensity more easily find an efficiency scale and are more dependent on internal financing and short-term debt as sources for funding growth, compared to the case of Portuguese SMEs with lower levels of R&D intensity. Copyright Springer-Verlag 2013

Keywords: Diversification; Growth; R&D intensity; SMEs; C23; L11; L25; L26 (search for similar items in EconPapers)
Date: 2013
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