Microfirms and innovation in the service sector

David B. Audretsch, Alexander Kritikos and Alexander Schiersch

EconStor Open Access Articles and Book Chapters, 2020, vol. 55, issue 4, 997-1018

Abstract: In the context of microfirms, this paper analyzes whether the link between the three aspects involving innovative activities—R&D, innovative output, and productivity—hold for knowledge-intensive services. With especially high start-up rates and the majority of employees in microfirms, knowledge-intensive services (KIS) have a starkly different profile from manufacturing. Results from our structural models indicate that KIS firms benefit from innovation activities through increased labor productivity with highly skilled employees being similarly important compared to R&D for creating innovation output in microfirms. Moreover, the firm size advantage of large firms found for manufacturing almost disappears in KIS, with start-ups and young firms having a higher probability of initiating innovation activities and of successfully turning knowledge into innovation output than mature firms.

Keywords: Microfirms; MSMEs; R&D; Service sector; Innovation; Productivity (search for similar items in EconPapers)
JEL-codes: L25 L26 L60 L80 O31 O33 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Journal Article: Microfirms and innovation in the service sector (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:225004

DOI: 10.1007/s11187-020-00366-4

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