Innovation through R&D activities in the European context: antecedents and consequences
Despite the fact that the determinants and the consequences of R&D activities have been extensively studied in previous research, further efforts to integrate disparate streams of literature might bring new insights into innovation decision-making by firms. In particular, this article studies the simultaneous effects that a set of factors (at both company and environmental levels of analysis) have on R&D activity, which explain firm growth. A two-stage probit least squares (2SPLS) estimation is applied to data from the EU-EFIGE/Bruegel-UniCredit dataset for seven European countries for the years 2007–2009. The main findings show that not all the R&D determinants lead to firm growth. In particular, R&D activities are affected by the employment of a significant number of foreign executives, a higher percentage of employees with fixed-term contracts, appropriate labour regulations and access to employees who have received external training, all of which are positively related to firm growth. Based on these results, policy and practical implications to improve firms’ performances are discussed.
KeywordsR&D management Firm growth Innovation Institutional economics Resource-based theory
JEL ClassificationL2 M1 O32 J6 B52
David Urbano and Andreu Turro acknowledge the financial support from the project ECO2017-87885-P (Spanish Ministry of Economy & Competitiveness). In addition, David Urbano acknowledges the financial support from project 2017-SGR-1056 (Economy & Knowledge Department, Catalan Government), and ICREA under ICREA Academia programme. Sebastian Aparicio acknowledges Durham University Business School for constant support. In addition, Sebastian acknowledges financial support from Colciencias Ph.D. programme Chapter 3 (617/2013), Enlaza Mundos Municipio de Medellín (2013), and Fundación ECSIM. Finally, the authors would also like to thank Prof. Albert N. Link and the two anonymous reviewers for their valuable comments during the publication process. A previous version of this article was presented at the Annual Meeting of the Academy of Management and several seminars. The authors appreciate all comments and suggestions made by participants.
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