Radical Innovation – A domain of SMEs? A novel test of the Schumpeterian Hypothesis

Nabil Abou Lebdi, ()
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Nabil Abou Lebdi,: CREA, Université de Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: The Schumpeterian Hypothesis has been subject to a plethora of research aiming at the provision of new insights to the relationship of innovation on firm size. Utilizing a panel of German companies in manufacturing industries from 1993-2011, this analysis explicitly distinguishes between radical and incremental innovation output. It reveals that firm size and radical innovation share an overall negative relationship, while the relationship between firm size and incremental innovation is positive. These results provide a novel explanation for the often-reported non-linear relationship between firm size and innovation.

Keywords: SME; firm size; radical innovation; incremental innovation; manufacturing industry (search for similar items in EconPapers)
JEL-codes: L11 O31 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:15-04

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