The influence of innovation on firm size

Gerrit de Wit and Niels Bosma ()

No N200318, Scales Research Reports from EIM Business and Policy Research

Abstract: This study puts forward the relevance of investigating the relation between innovation and firm size, acknowledging differences between process innovation and product innovation. From different strands in economic literature, the relevance of innovation in explaining average firm size has been put forward. The efforts made so far in this particular research area, are still limited. Future empirical studies in this area would ideally require a two-way causation model and appropriate datasets. Our empirical results suggest a positive impact of innovation on average firm size. Furthermore, larger shares of process innovation per-formed by the company itself are associated with smaller average firm size.

Pages: 11 pages
Date: 2003-12-29
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Persistent link: https://EconPapers.repec.org/RePEc:eim:papers:n200318

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