Environmental Dynamism, Firm Size and the Economic Productivity of R&D Articles uri icon

publication date

  • August 2013

start page

  • 503

end page

  • 522

issue

  • 6

volume

  • 20

International Standard Serial Number (ISSN)

  • 1366-2716

Electronic International Standard Serial Number (EISSN)

  • 1469-8390

abstract

  • The effects of firm size on innovative activity have been extensively debated in the literature, with generally inconclusive results. This study poses a contingent framework in which environmental dynamism moderates the effects of firm size on the returns to research and development (R&D) investments. We hypothesize that dynamic environments favor small firms, as they reward organizational flexibility and promote the development of the markets for technology. Empirical evidence obtained on a sample of Spanish manufacturing firms shows that technological, but not market, dynamism negatively moderates the effects of firm size on the economic productivity of R&D, thus contributing to the success of research efforts by small firms vis-a-vis those of larger corporations.

keywords

  • research and development; innovation; environmental dynamism; firm size; productivity