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SME innovation, exporting and growth: A review of existing evidence
01 Jan 2013-
TL;DR: In this article, the authors summarise and synthesise the evidence on SME innovation, exporting and growth, paying particular attention to internal and external enablers, and for the interplay between innovation and exporting in SME growth.
Abstract: SMEs which have a track record of innovation are more likely to export, more likely to export successfully, and more likely to generate growth from exporting than non-innovating firms. What are the factors that enable such performance? This paper summarises and synthesises the evidence on SME innovation, exporting and growth, paying particular attention to internal and external (eco-system) enablers, and for the interplay between innovation and exporting in SME growth. We highlight those areas for which the evidence base is secure and where the evidence base remains limited, and develop policy suggestions and an agenda for further research.
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TL;DR: In this paper, a systematic review of 118 peer-reviewed journal articles published between 1961 and 2017 provides an integrative picture of the state of the art of the family firm innovation literature.
Abstract: Through a systematic review of 118 peer-reviewed journal articles published between 1961 and 2017, this article provides an integrative picture of the state of the art of the family firm innovation literature. Our aim is to widen existing understanding of innovation in family firms by building a theoretical bridge with studies in the mainstream innovation literature. Specifically, in identifying the main gaps in the literature and providing future research directions, our critical and dynamic picture of family-specific determinants of innovation is intended to advance the debate on innovation in general, and family firms in particular.
271 citations
TL;DR: In this article, the authors investigate how German Mittelstand firms flourish and achieve high innovation performance despite the severe financial and human capital resource constraints they face as compared with larger corporations, and present a model identifying and integrating six salient traits of such firms that allow them to efficiently orchestrate their resources to innovate and outcompete their competitors in the global market.
263 citations
TL;DR: In this article, the authors demonstrate how small manufacturing firms can leverage their Information Technology (IT) resources to develop the lean-digitized manufacturing system that offers sustained competitive advantages over traditional manufacturing systems.
Abstract: purpose– The study demonstrates how small manufacturing firms can leverage their Information Technology (IT) resources to develop the lean-digitized manufacturing system that offers sustained compe ...
207 citations
TL;DR: In this article, the authors consider the determinants of SME exporting performance using a survey of internationally engaged UK SMEs and develop a model incorporating organisational and prior managerial learning effects to identify separately the positive effects on exporting from the international experience of the firm and the negative effects of firm age.
194 citations
TL;DR: In this article, the authors examined inclusive leadership as a predictor of innovative work behavior with the mediating role of psychological safety and found that inclusive leadership is positively related with innovative work behaviour, and psychological safety mediates the effect of inclusive leadership.
Abstract: The purpose of this study is to examine inclusive leadership as a predictor of innovative work behavior with the mediating role of psychological safety. Data were collected from supervisors–subordinates dyads working in textile industry in Pakistan. Our findings suggest that inclusive leadership is a positively related with innovative work behavior, and psychological safety mediates the effect of inclusive leadership on innovative work behavior. The leader–member exchange theory was used to build our theoretical model. We have also discussed theoretical and practical implications of our findings.
185 citations
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TL;DR: Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance.
Abstract: A central part of the innovation process concerns the way firms go about organizing search for new ideas that have commercial potential. New models of innovation have suggested that many innovative firms have changed the way they search for new ideas, adopting open search strategies that involve the use of a wide range of external actors and sources to help them achieve and sustain innovation. Using a large-scale sample of industrial firms, this paper links search strategy to innovative performance, finding that searching widely and deeply is curvilinearly (taking an inverted U-shape) related to performance. Copyright © 2005 John Wiley & Sons, Ltd.
5,167 citations
TL;DR: In this article, Helpman et al. introduce a simple multicountry, multisector model, in which firms face a proximity-concentration trade-off between exports and FDI.
Abstract: Multinational sales have grown at high rates over the last two decades, outpacing the remarkable expansion of trade in manufactures. Consequently, the trade literature has sought to incorporate the mode of foreign market access into the “new” trade theory. This literature recognizes that rms can serve foreign buyers through a variety of channels: they can export their products to foreign customers, serve them through foreign subsidiaries, or license foreign rms to produce their products. Our work focuses on the rm’s choice between exports and “horizontal” foreign direct investment (FDI). Horizontal FDI refers to an investment in a foreign production facility that is designed to serve customers in the foreign market. Firms invest abroad when the gains from avoiding trade costs outweigh the costs of maintaining capacity in multiple markets. This is known as the proximity-concentration tradeoff. We introduce heterogeneous rms into a simple multicountry, multisector model, in which rms face a proximity-concentration trade-off. Every rm decides whether to serve a foreign market, and whether to do so through exports or local subsidiary sales. These modes of market access have different relative costs: exporting involves lower xed costs while FDI involves lower variable costs. Our model highlights the important role of within-sector rm productivity differences in explaining the structure of international trade and investment. First, only the most productive rms engage in foreign activities. This result mirrors other ndings on rm heterogeneity and trade; in particular, the results reported in Melitz (2003). Second, of those rms that serve foreign markets, only the most productive engage in FDI. Third, FDI sales relative to exports are larger in sectors with more rm heterogeneity. Using U.S. exports and af liate sales data that cover 52 manufacturing sectors and 38 countries, we show that cross-sectoral differences in rm heterogeneity predict the composition of trade and investment in the manner suggested by our model. We construct several measures of rm heterogeneity, using different data sources, and show that our results are robust across all these measures. In addition, we con rm the predictions of the proximityconcentration trade-off. That is, rms tend to substitute FDI sales for exports when transport * Helpman: Department of Economics, Harvard University, Cambridge, MA 02138, Tel Aviv University, and CIAR (e-mail: ehelpman@harvard.edu); Melitz: Department of Economics, Harvard University, Cambridge, MA 02138, National Bureau of Economic Research, and Centre for Economic Policy Research (e-mail: mmelitz@ harvard.edu); Yeaple: Department of Economics, University of Pennsylvania, 3718 Locust Walk, Philadelphia, PA 19104, and National Bureau of Economic Research (e-mail: snyeapl2@ssc.upenn.edu). The statistical analysis of rmlevel data on U.S. Multinational Corporations reported in this study was conducted at the International Investment Division, U.S. Bureau of Economic Analysis, under an arrangement that maintained legal con dentiality requirements. Views expressed are those of the authors and do not necessarily re ect those of the Bureau of Economic Analysis. Elhanan Helpman thanks the NSF for nancial support. We also thank Daron Acemoglu, Roberto Rigobon, Yona Rubinstein, and Dani Tsiddon for comments on an earlier draft, and Man-Keung Tang for excellent research assistance. 1 See Wilfred J. Ethier (1986), Ignatius Horstmann and James R. Markusen (1987), and Ethier and Markusen (1996) for models that incorporate the licensing alternative. We therefore exclude “vertical” motives for FDI that involve fragmentation of production across countries. See Helpman (1984, 1985), Markusen (2002, Ch. 9), and Gordon H. Hanson et al. (2002) for treatments of this form of FDI. 3 See, for example, Horstmann and Markusen (1992), S. Lael Brainard (1993), and Markusen and Anthony J. Venables (2000). 4 See also Andrew B. Bernard et al. (2003) for an alternative theoretical model and Yeaple (2003a) for a model based on worker-skill heterogeneity. James R. Tybout (2003) surveys the recent micro-level evidence on trade that has motivated these theoretical models. 5 This result is loosely connected to the documented empirical pattern that foreign-owned af liates are more productive than domestically owned producers. See Mark E. Doms and J. Bradford Jensen (1998) for the United States and Sourafel Girma et al. (2002) for the United Kingdom.
3,823 citations
TL;DR: In this paper, the authors investigate if open innovation practices are also applied by small and medium-sized enterprises (SMEs) and explore the incidence of and apparent trend towards open innovation.
1,947 citations
Abstract: Export marketing literature supports the view that firm size is positively related to export intensity. Although the empirical findings have been mixed, a number of theoretical arguments are used to support this proposition, i.e., international marketing economies of scale, limited managerial and financial resources of small firms, decisionmaker's risk perception. Based on a large survey of the Italian manufacturing industry, the article falsifies the proposition and challenges some widely held assumptions in export marketing literature.
1,540 citations
Posted Content•
TL;DR: In this article, the authors studied the links between productivity, innovation and research at the level of manufacturing and found that higher productivity correlates positively with an higher innovation output, even when controlling fo the skill composition of labor as well as for physical capital intensity.
Abstract: This paper studies the links between productivity, innovation and research at th level. We introduce three new features: (i) A structural model that explains pro by innovation output, and innovation output by research investment; (ii) New dat manufacturing firms, including the number of European patents and the percentage sales, as well as firm-level demand pull and technology push indicators; (iii) E which correct for selectivity and simultaneity biases and take into account the features of the available data: only a small proportion of firms engage in resea apply for patents; productivity, innovation and research are endogenously determ investment and capital are truncated variables, patents are count data and innov We find that using the more widespread methods, and the more usual data and mode may lead to sensibly different estimates. We find in particular that simultaneit with selectivity, and that both sources of biases must be taken into account tog results are consistent with many of the stylized facts of the empirical literatu of engaging in research (R&D) for a firm increases with its size (number of empl share and diversification, and with the demand pull and technology push indicato capital intensity) of a firm engaged in research increases with the same variabl research capital being strictly proportional to size). The firm innovation outpu patent numbers or innovative sales, rises with its research effort and with the indicators, either directly or indirectly through their effects on research. Fin correlates positively with an higher innovation output, even when controlling fo the skill composition of labor as well as for physical capital intensity.
1,420 citations