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The Journal of Technology Transfer

, Volume 37, Issue 5, pp 732–754 | Cite as

Small business innovation: firm level evidence from Sweden

  • Martin AnderssonEmail author
  • Hans Lööf
Article

Abstract

This paper examines innovation among very small firms and provides new insights into both internal and external determinants of patenting. Applying a non-linear panel data approach to about 160,000 observations on manufacturing firms in Sweden for the period 2000–2006, the following facts emerge: (i) in contrast to larger firms, innovation in micro firms with 1–10 employees is not sensitive to variation in internal financial resources, (ii) skilled labour is even more important for innovation among micro firms compared to other firms, (iii) affiliation to a domestically owned multinational enterprise group increases the innovation capacity of small businesses, (iv) small firms’ innovation is closely linked to participation in international trade and exports to the G7-countries, and (v) there is no statistically significant evidence that proximity to metropolitan areas, or presence in a specialized cluster, increases the innovativeness of the smallest firm.

Keywords

Innovation Innovative firms Entrepreneurship Small firms Intellectual property rights Technology transfer Location 

JEL Classification

F43 L26 M13 O31 O34 

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Copyright information

© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Centre of Excellence for Science and Innovation Studies (CESIS)Royal Institute of TechnologyStockholmSweden
  2. 2.Jönköping International Business School (JIBS)JönköpingSweden
  3. 3.Blekinge Institute of Technology (BTH)KarlskronaSweden
  4. 4.Division of Economics and CESISRoyal Institute of TechnologyStockholmSweden

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