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Small is big in ICT: The impact of R&D on productivity

Year: 2019

Type: article

Abstract: We examine the contribution of R&D to firm productivity in a large panel of European firms and study its variation with the age, size, and sub-sector of firms. We find that R&D capital in ICT firms has a larger effect on revenue when compared to non-ICT firms. At the firm level, our results suggest that, surprisingly, smaller and older ICT firms benefit the most from R&D. Small but mature ICT firms are likely to dominate market niches, and small size may enable them to be flexible and adaptable which helps them respond to technological opportunities to develop innovative products and services. This has important implications for public policy based upon firm age. • R&D capital in ICT firms has a larger effect on revenue when compared to non-ICT firms. • Smaller and older ICT firms benefit the most from R&D capital. • Small but mature ICT firms are likely to dominate market niches.

Source: Telecommunications Policy

DOI: 10.1016/j.telpol.2019.101833

Authors: Pantelis Koutroumpis, Aija Leiponen, Llewellyn D.W. Thomas

Institutions: University of Oxford, Cornell University, Universitat Ramon Llull

Language: English

Topic: Firm Innovation and Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $1,800