Abstract:
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This paper analyzes the effect of firms’ innovation activities on their growth
performance. In particular, we observe how important innovation is for high-growth
firms (HGFs) for an extensive sample of Spanish manufacturing and services firms.
The panel data used comprises diverse waves of Spanish CIS over the the period
2004-2008. First, a probit analysis determines whether innovation affects the
probability of being a high-growth firm. And second, a quantile regression technique
is applied to explore the determinants and characteristics of specific groups of firms
(manufacturing versus service firms and high-tech versus low-tech firms). It is
revealed that R&D plays a significant role in the probability of becoming a HGF.
Investment in internal and external R&D per employee has a positive impact on firm
growth (although internal R&D presents a significant impact in the last quantiles,
external R&D is significant up to the median). Furthermore, we show evidence that
there is a positive impact of employment (sales) growth on the sales (employment)
growth.
Keywords: high-growth firms, firm growth, innovation activity
JEL Classifications: L11, L25, O30 |