RELATIONSHIP BETWEEN FIRM SIZE AND TECHNICAL INNOVATION: AN EMPIRICAL REEXAMINATION.
Item
-
Title
-
RELATIONSHIP BETWEEN FIRM SIZE AND TECHNICAL INNOVATION: AN EMPIRICAL REEXAMINATION.
-
Identifier
-
AAI8401487
-
identifier
-
8401487
-
Creator
-
SULLIVAN, EDGAR JOSEPH.
-
Contributor
-
Prof. Steven Lustgarten
-
Date
-
1983
-
Language
-
English
-
Publisher
-
City University of New York.
-
Subject
-
Business Administration, General
-
Abstract
-
This empirical study tests the hypothesis that large firms account for more than their proportionate share of technical progress in industries in which product and process innovation is characterized by complexity, while small firms predominate in industries in which ingenuity is important.;The findings of the prior tests of the relationship between firm size and innovative output, which have typically aimed at substantiating or repudiating the Schumpeterian hypothesis, have not produced a consensus. A less doctrinaire hypothesis and access to a comprehensive and consistent data set, a resource not available to most prior researchers, provide the opportunity for further insight into this hoary issue.;The current study which used R&D expenditures as a surrogate for innovative output and sales as a proxy for size includes data on 2,795 firms for the year 1980. The data were divided into six technical opportunity groups to control for interindustry differences. A nonlinear specification with a cubic term--a model similar to the type used by some prior researchers--was used to test the basic hypothesis and to detect inflection points. Weighted least squares--a refinement not used by prior researchers--were used to address directly the heteroscedasticity problem inherent in this type of analysis. Implicit and/or explicit censored data problems, a shortcoming of much of the prior empirical work, were also addressed. Many of the prior studies were limited to a single industry or to samples drawn from Fortune's 500 largest firms. In contrast, the current study covers the breadth of American industry. Moreover, to eliminate explicit censoring in the data set employed, a specific censored data algorithm was constructed to estimate the R&D expenditures of the 585 firms which report that R&D expenditures were "insignificant"--an amount greater than zero but less than 1% of sales.;The results show that in many industrial settings innovative output increases more than proportionately with firm size. This relationship, however, does not apply universally, as Schumpeter's most ardent disciples contend. There are some industrial settings in which small firms are proportionately more innovative than large firms.
-
Type
-
dissertation
-
Source
-
PQT Legacy CUNY.xlsx
-
degree
-
Ph.D.
-
Program
-
Business
