Are large innovative firms more efficient?

Sánchez, Rosario/R and M. Angeles Diaz
Authors registered in the RePEc Author Service: Rosario Sánchez Pérez

MPRA Paper from University Library of Munich, Germany

Abstract: One of the characteristics of the Spanish economy is the high percentage of small and medium-sized firms. Size is one of the factors that condition the managerial organization of the firms and their efficiency and productivity. Moreover size has been found a highly significant variable in explaining differences in firm’s innovative activities and the returns of R&D expenditures, and it is a well-established connection between productivity and innovative activities. This paper analyses the relationship between innovative activities and size and their effect over firms’ technical efficiency and then over their productivity. We also take into account other variables that could affect the relationship between productivity and innovative activities: industrial sector, market structure, or firms’ financial conditions. The analysis could help to design political economic measures to encourage small firms’ innovation and then contribute to improve their competitiveness. We use a micro panel data set of Spanish manufacturing firms, during the period 2004–2009, to simultaneously estimate a stochastic frontier production function and the inefficiency determinants. The data source is published in the Spanish Industrial Survey on Business Strategies (Encuesta sobre Estrategias Empresariales, ESEE), collected by the Fundación SEPI. Our preliminary results show that innovative firms are more efficient than non-innovative firms; and that small and medium-sized firms’ tent to be more efficient than large firms are.

Keywords: small firms; technical efficiency; innovative activities. (search for similar items in EconPapers)
JEL-codes: C23 J21 L60 (search for similar items in EconPapers)
Date: 2013-02-25
New Economics Papers: this item is included in nep-com, nep-cse, nep-eff, nep-ent, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ARE LARGE INNOVATIVE FIRMS MORE EFFICIENT? (2013)
Working Paper: Are large innovative firms more efficient? (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44592

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