Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation that incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the

Non-R&D innovation is a common economic phenomenon, though R&D has been the central focus of policy making and scholarly research in the field of innovation. An analysis of the third European Community Innovation Survey (CIS-3) results for 15 countries finds that almost half of innovative European firms did not perform R&D in-house. Firms with weak in-house innovative capabilities and which source information from suppliers and competitors tend to innovate through non-R&D activities. In contrast, firms that engage in product innovation, find clients, universities and research institutions an important information source for innovation, or apply for patents or use other appropriation methods are more likely to perform R&D. However, non-R&D performers do not form a consistent block, with several notable differences between firms that use three different methods of innovating without performing R&D. Many of these determinants also influence the share of total innovation expenditures that are spent on non-R&D innovation activities. Furthermore, an analysis of the determinants of the share of each firm’s total innovation expenditures for non-R&D activities shows that the factors that influence how innovation expenditures are distributed is generally consistent across sectors and European

This paper aims to examine the hypothesis of the influence of high performance work practices (HPWPs) and industrial relations on firm propensity for product and process innovation. The database used is constituted by a sample of 166 manufacturing firms located in the Lombardy region (Italy). The estimates carried out indicate that workplace governance that relies heavily on a unilateral and autocratic implementation of HPWPs has a positive and significant effect on both types of innovation. This effect becomes more pronounced – in terms of product innovation ‒ in the presence of „democratic ‟ workplace governance style and workers ‟ representatives exercising an amicable and soft role (in a participatory style) and limiting their actions around profit-sharing incentive schemes. The driving force exerted by workers ‟ representatives in respect of product innovation can be explained by the idea that this innovation represents the path that can better protect workers‟ prospects in an uncertain and unstable competitive environment. The results also show that when workers‟ representatives perform an „advocatory ‟ role, extending their influence to a wide range of issues (such as re-organization processes, employment levels, etc.), firm propensity for product innovation reduces. This outcome can be interpreted as a «hold-up problem», namely, a likely appropriation by workers of quasi-rent from investments in product innovation through increased bargaining power, with the subsequent risk that these investments turn into sunk

The knowledge spillover theory of entrepreneurship seeks to explain the sources of entrepreneurship and its consequences with regard to economic performance. This paper extends the theory and links it to innovation performance. We propose that a high rate of entrepreneurship facilitates the process of turning knowledge into innovative products, while it has no effect on the relationship between knowledge and imitative products. We use European country-level data to test our propositions. Our results show that a high rate of entrepreneurship increases the chances that knowledge will turn into innovative products. The findings highlight the importance of entrepreneurs in the process of the commercialization of knowledge. Implications for innovation policy are discussed.

Innovation in SMEs exhibits some peculiar features that most traditional indicators of innovation activity do not capture. Therefore, in this paper, we develop a structural model of innovation which incorporates information on innovation success from firm surveys along with the usual R&D expenditures and productivity measures. We then apply the model to data on Italian SMEs from the “Survey on Manufacturing Firms ” conducted by Mediocredito-Capitalia covering the period 1995-2003. The model is estimated in steps, following the logic of firms’ decisions and outcomes: in the first, R&D intensity is linked to a set of firm and market characteristics. We find that international competition fosters R&D intensity, especially for high-tech firms. Firm size, R&D intensity, along with investment in equipment enhances the likelihood of having both process and product innovation. Both these kinds of innovation have a positive impact on firm’s productivity, especially process innovation. Among SMEs, larger and older firms seem to be less productive.

BARRIERS TO INNOVATION AND PUBLIC POLICY IN CATALONIA*

There are a number of studies on the relationship between the innovation and firm performance in the case of highly developed countries, starting with the classic paper by Crépon et al. (1998), however there are only very few studies on the developing countries and similar studies on Central and Eastern European catching-up economies seem to be lacking. This paper studies whether there is significant association between product or process innovation of firms and their productivity in Estonia, a small catching-up economy. We use firm-level data from the Community Innovation Surveys (CIS3 and CIS4) combined with the Estonian Business Register data on the population of all firms and compare the results with similar studies of other European countries. We apply for the analysis a structural model that involves a system of equations on innovation expenditure, innovation outcome and productivity (called in this literature CDM model). Our results show that process innovations have a strong positive effect on productivity, but there is no effect of product innovations.

Abstract: based on the pharmaceutical firm data from the census of National Bureau of Statistics, the relationship among innovation input, innovation output and firm competitiveness is examined. The results indicated that the relationship between innovation input and firm size follows an inverted U-shaped while the relationship between innovation output and firm size seems U-shaped. In addition, there is a significant positive correlation between innovation input and innovation output as well as between innovation output and firm competitiveness. Furthermore, comparing to other types of enterprises, the state-owned units have higher innovation inputs and the share-holding corporations limited have higher innovation outputs. When compared with the old firms, the young firms have lower innovation inputs but higher innovation outputs.

Corporate R&D and firm efficiency: Evidence from Europe’s top R&D investors

This paper is funded by the Productivity Hub under the Productivity Partnership programme. The results in this paper are not official statistics, they have been created for research purposes from the Integrated Data Infrastructure (IDI) managed by Statistics New Zealand. The opinions, findings, recommendations and conclusions expressed in this paper are those of the authors not necessarily of Statistics NZ, the NZ Productivity Commission, Motu Economy & Public Policy Research, or the National Bureau of Economic Research. Access to the anonymised data used in this study was provided by Statistics NZ in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business or organisation and the results in this paper have been confidentialised to protect these groups from identification. Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the privacy impact assessment for the IDI available from www.stats.govt.nz. The results are based in part on tax data supplied by Inland Revenue to Statistics NZ under the Tax Administration Act 1994. This tax data must be used only for statistical purposes, and no individual information may be published or disclosed in any other form, or provided to Inland Revenue for administrative or regulatory purposes. Any person who has had access to the unit-record data has certified that they have been shown, have read, and have understood section 81 of the Tax Administration Act 1994, which relates to secrecy. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes, and is not related to the data’s ability to support Inland Revenue’s core operational requirements. Statistics NZ confidentiality protocols were applied to the data sourced from the Ministry of Business, Innovation