Small Business Economics

, Volume 33, Issue 1, pp 59–75 | Cite as

Is the R&D behaviour of fast-growing SMEs different? Evidence from CIS III data for 16 countries

Article

Abstract

This paper studies the R&D behaviour of fast growing SMEs using CIS III data for 16 countries. We group the countries into three categories of countries having roughly the same stage of technological development. Our first finding is that R&D is more important to high-growth SMEs in countries that are closer to the technological frontier. The second finding is that high-growth SMEs are only more innovative than non-high-growth SMEs in countries close to the technological frontier. This suggests that gazelles derive much of their drive from the exploitation of comparative advantages. From a policy perspective, this indicates that there are important limits to centralising policies that aim to foster high-growth SMEs.

Keywords

R&D High-growth firms Europe CIS 

JEL Classifications

L25 L26 O31 P52 

References

  1. Abadie, A., Drukker, D., Herr, J. L., & Imbens, G. W. (2004). Implementing matching estimators for average treatment effects in Stata. Stata Journal, 4, 290–311.Google Scholar
  2. Abadie, A., & Imbens, G. (2006). Large sample properties of matching estimators for average treatment effects. Econometrica, 74, 235–267.CrossRefGoogle Scholar
  3. Acemoglu, D, Aghion, P., & Zilibotti, F. (2006). Distance to frontier, selection, and economic growth. Journal of the European Economic Association, 4, 37–74.CrossRefGoogle Scholar
  4. Acs, Z. J., Parsons, W.,& Tracy, S. (2008). High-impact firms: Gazelles revisited. Washington, DC: SBA Office of Advocacy.Google Scholar
  5. Ahmad, N. (2006). A proposed framework for business demography statistics. OECD Statistics Directorate, Working Paper STD(2006)3.Google Scholar
  6. Ahmad, N., & Gonnard, E. (2007). High growth enterprises and gazelles. Paper prepared for the International Consortium on entrepreneurship (ICE) Meeting February 2007, Copenhagen, Denmark.Google Scholar
  7. Ahn, S. (2002). Competition, innovation and productivity growth: A review of theory and evidence. Economics Department, Working Paper 317, OECD, ECO-WKP-2002(3).Google Scholar
  8. Almus, M. (2002). What characterizes a fast growing firm? Applied Economics, 34, 1497–1508.CrossRefGoogle Scholar
  9. Autio, E., Arenius, P., & Wallenius, H. (2000). Economic impact of gazelle firms in Finland. Helsinki University of Technology, Institute of Strategy and International Business, Working Paper 2000/3.Google Scholar
  10. Autio, E., & Hölzl, W. (2008). Addressing challenges for high-growth companies: Summary and conclusions of the Europa Innova Gazelles Innovation Panel. Europa Innova Paper No. 6, European Commission, DG Enterprise and Industry.Google Scholar
  11. Autio, E., Kronlund, M., & Kovalainen, A. (2007). High-growth SME support initiatives in nine countries: Analysis, categorization, and recommendations. MTI Publications 1/2007. Helsinki: Ministry of Trade and Industry.Google Scholar
  12. Birch, D. (1981). Who creates jobs. Public Interest, 65, 3–14.Google Scholar
  13. Birch, D. (1987). Job creation in America. New York: Free Press.Google Scholar
  14. Bridge, S., O’Neill, K., & Cromie, S. (2003). Understanding enterprise, entrepreneurship and small business (2nd ed.). New York: Palgrave MacMillan.Google Scholar
  15. Bottazzi, G., & Secchi, A. (2006). Explaining the distribution of firms growth rates. Rand Journal of Economics, 37, 234–263.CrossRefGoogle Scholar
  16. Catozzella, A., Vivarelli, M. (2007). The catalysing role of in-house R&D in fostering the complementarity of innovative Inputs. IZA Working Paper No. 3126.Google Scholar
  17. Caves, R. E. (1998). Industrial organization and new findings on the turnover and mobility of firms. Journal of Economic Literature, 36, 1947–1982.Google Scholar
  18. Coad, A., & Rao, R. (2008a). Innovation and firm growth in high-tech sectors: A quantile regression approach. Research Policy, 37, 633–648.CrossRefGoogle Scholar
  19. Coad, A., & Rao, R. (2008b). Firm growth and R&D expenditure. Max Planck Institute of Economics Papers on Economics and Evolution No. 0710.Google Scholar
  20. Cohen, W. M., & Levinthal, D. A. (1989). Innovation and learning: The two faces of R&D. The Economic Journal, 99, 569–596.CrossRefGoogle Scholar
  21. Conte, A., & Vivarelli, M. (2005). One or many knowledge production functions? Mapping innovative activity using microdata. IZA Working Paper No. 1878.Google Scholar
  22. Davidsson, P., Lindmark, L., & Olofsson, C. (1998). The extent of overestimation of small firm job creation—An empirical examination of the regression bias. Small Business Economics, 11, 87–100.CrossRefGoogle Scholar
  23. Davila, A., Foster, G., & Gupta, M. (2003). Venture capital financing and the growth of start-up firms. Journal of Business Venturing, 18, 689–708.CrossRefGoogle Scholar
  24. Freel, M. S. (2000). Do small innovating firms outperform non-innovators?. Small Business Economics, 14, 195–210CrossRefGoogle Scholar
  25. Geroski, P. A., & Machin, S. (1992). Do innovating firms outperform non-innovators? Business Strategy Review, 3, 79–90.CrossRefGoogle Scholar
  26. Heckman, J. J., Ichimura, H., & Todd, P. (1998). Matching as an econometric evaluation estimator. Review of Economic Studies, 65, 261–294.CrossRefGoogle Scholar
  27. Heckman, J. J., LaLonde, R. J., & Smith, J. A. (1999). The economics and econometrics of active labour market programs. In O. Astenfelther & D. Card (Eds.), Handbook of labor economics (Vol. IIIA, Chap. 31, pp. 1865–2097). Amsterdam: Elsevier.Google Scholar
  28. Henrekson, M, & Johansson, D. (2009). Gazelles as job creators—A survey and interpretation of the evidence. Small Business Economics. doi:10.1007/s11187-009-9172-z Google Scholar
  29. Holtz-Eakin, D. (2000). Public policy toward entrepreneurship. Small Business Economics, 15, 183–291.CrossRefGoogle Scholar
  30. Hölzl, W., & Friesenbichler, K. (2008). Final sector report gazelles. Europe Innova Sector Report. Vienna, WIFO.Google Scholar
  31. Koenker, R. (2005). Quantile regression. Cambridge University Press: Cambridge.Google Scholar
  32. Lotti, F., Santarelli, E., & Vivarelli, M. (2003). Does Gibrat’s Law hold among young, small firms?. Journal of Evolutionary Economics, 13, 213–235CrossRefGoogle Scholar
  33. Mairesse, J., & Mohnen, P. (2002). Accounting for innovation and measuring innovativeness: An illustrative framework and an application. American Economic Review, 92, 226–231.CrossRefGoogle Scholar
  34. Mairesse, J., & Mohnen, P. (2004). The importance of R&D for innovation: A reassessment using French survey data. NBER Working Paper 10897.Google Scholar
  35. Parker, S., Storey, D., & Witteloostuijn, A. (2005). What happens to gazelles? The importance of dynamic management strategy. Warwick Business School, Centre for Entrepreneurship Discussion Paper No. 12, September.Google Scholar
  36. Reichstein, T., Dahl, M. S., Ebersberger, B., Jensen, M. B., (2006). The devil dwells in the tails: A quantile regression approach to firm growth. Journal of Evolutionary Economics, forthcoming.Google Scholar
  37. Roper, S. (1997). Product Innovation and Small Business Growth: A comparison of strategies of German, UK and Irish companies. Small Business Economics, 9, 523–537.CrossRefGoogle Scholar
  38. Santarelli, E., Klomp, L., & Thurik, A. R. (2006). Gibrat’s Law: An overview of the empirical literature. In E. Santarelli (Ed.), Entrepreneurship, growth, and innovation: The dynamics of firms and industries: International Studies in Entrepreneurship (pp. 41–73). Berlin: Springer Verlag.Google Scholar
  39. Santarelli, E., & Sterlacchini, A. (1990). Innovation, formal vs. informal R&D, and firm size: Some evidence from Italian manufacturing firms. Small Business Economics, 2, 223–228.CrossRefGoogle Scholar
  40. Santarelli, E., & Vivarelli, M. (2007). Entrepreneurship and the process of firms’ entry, survival and growth. Industrial and Corporate Change, 16, 455–488.CrossRefGoogle Scholar
  41. Schreyer, P. (2000). High-growth firms and employment. OECD STI Working Paper 2000/3.Google Scholar
  42. Stanley, M., Amaral, N., Buldyrev, S., Havlin, S., Leschhorn, H., Maass, P., Salinger, M., & Stanley, H. (1996). Scaling behavior in growth of companies. Nature, 379, 804–806.CrossRefGoogle Scholar
  43. Sutton, J. (1997). Gibrat’s legacy. Journal of Economic Literature, 35, 40–59.Google Scholar
  44. Verspagen, B. (2007). The spatial hierarchy of technological change and economic development in Europe. UNU-MERIT Working Paper Series 012.Google Scholar
  45. Wong, P., Kam, Y., & Autio, E. (2005). Entrepreneurship, innovation and economic growth: Evidence from GEM data. Small Business Economics, 24, 335–350.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  1. 1.Austrian Institute of Economic Research (WIFO)ViennaAustria

Personalised recommendations