Innovation and firm growth: Does firm age play a role?

Alex Coad, Agustí Segarra, Mercedes Teruel

Research output: Contribution to journalArticle

176 Citations (Scopus)

Abstract

This paper explores the relationship between innovation and firm growth for firms of different ages. We hypothesize that young firms undertake riskier innovation activities which may have greater performance benefits (if successful), or greater losses (if unsuccessful). Using an extensive Spanish Community Innovation Survey sample for the period 2004-2012, we apply panel quantile regressions to study the effect of R&D activities on firm growth (i.e. sales growth, productivity growth and employment growth). Our results show that young firms face larger performance benefits from R&D at the upper quantiles of the growth rate distribution, but face larger decline at the lower quantiles. R&D investment by young firms therefore appears to significantly riskier than R&D investment by more mature firms, which suggests some policy implications.

Original languageEnglish
Pages (from-to)387-400
Number of pages14
JournalResearch Policy
Volume45
Issue number2
DOIs
Publication statusPublished - 2016 Mar 1
Externally publishedYes

Keywords

  • Firm age
  • Firm growth
  • Innovation
  • Panel quantile regression
  • Post-entry growth
  • Scale-up

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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