Environmental Dynamism,Firm Size and the Economic Productivity of R&D |
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Authors: | Antonio Revilla Zulima Fernández |
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Affiliation: | Business Management Division, Universidad Carlos III de Madrid , Madrid , Spain |
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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-à-vis those of larger corporations. |
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Keywords: | Research and development innovation environmental dynamism firm size productivity |
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