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ON THE ROLE OF PROCESS INNOVATIONS ON SMES PRODUCTIVITY GROWTH?

Juan A. Mañez, María E. Rochina-Barrachina, Amparo Sanchis-Llopis () and Juan A. Sanchis
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María E. Rochina-Barrachina: Universidad de Valencia and ERICES
Juan A. Sanchis: Universidad de Valencia and ERICES

Authors registered in the RePEc Author Service: Maria Engracia Rochina Barrachina and Juan A. Sanchis Llopis ()

No 1125, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: In this paper we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self selection into these activities. First, we analyse whether the ex-ante most productive SMEs are those that start introducing process innovations; then, we test whether process innovations boost SMEs productivity growth using matching techniques to control for the possibility that selection into introducing process innovations may not be a random process. We use a sample of Spanish manufacturing SMEs for the period 1991-2002, drawn from the Encuesta sobre Estrategias Empresariales. Our results show that the introduction of process innovations yields an extra productivity growth, and that the life span of this extra productivity growth lasts for only one period.

Keywords: Process innovations; TFP; stochastic dominance; matching techniques (search for similar items in EconPapers)
JEL-codes: C14 C21 D24 L1 L25 O3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ent and nep-sbm
Date: 2011-12
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