Innovation is a key factor in modern economies and many companies invest in R & D to obtain such innovations, with both public and private resources. The objective is to achieve and increase productivity and economic growth, but it could also provide a guarantee of long-run performance. The present work explores the relationship between R & D and firm survival. The hypothesis that R & D activity is a positive factor for firm survival is contrasted using data from the Encuesta Sobre Estrategias Empresariales (ESEE – Business Strategies Survey) for the period 1991–2010 and for a sample of Spanish manufacturing firms. With these data, a Cox proportional hazard model is estimated. The results show the existence of a positive relationship between R & D expenditure and survival probability, with differences depending on the environment. Specifically, we show that increasing the ratio of R & D to turnover lowers exit probability, controlling for other factors. The different environments are defined as combinations of both technological (or not) regions and sectors in which firms operate.
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María Jesús Abellán Madrid, Antonio García-Tabuenca and Cristina Suárez Gálvez
Knut Ingar Westeren
The concept of a routine has been given attention in the economics, business and organizational literature for many years. In this chapter we start with a discussion of how definitions of the concept have developed – the starting point being ‘pattern’, which is linked to rules/guidelines of behavior. The most common interpretation is that routines are understood as activity patterns that regulate behavior. In more recent analysis we have seen routines interpreted in a collective way linked to group behavior. The chapter also discusses different characteristics that can be linked to the concept of routines. Important themes here are stability of routines, how they repeat themselves and to what extent they are context and path dependent. The chapter ends with an empirical example where we discuss how learning and innovations can be seen in relation to creation, maintenance and changes in routines.
It is often claimed that there are locally embedded values and attitudes towards entrepreneurship, exerting a strong influence on the rate and level of entrepreneurial activity in regions. The concept of regional entrepreneurship culture aims to capture such phenomena, and refers in a general sense to the level of social acceptance and encouragement of entrepreneurs and their activities in a region. This chapter discusses regional entrepreneurship culture as a source of persistent differences in regional rates of new firm formation, and presents a number of empirical regularities for Sweden to illustrate the empirical relevance of the main arguments. Using data on rates of new firm formation across Swedish regions over time, the chapter further explores the association between start-up activity and the business cycle, as well as how the geographic distribution of start-up rates changes during a major economic crisis.
Nerine Mary George, Sergey Anokhin, Vinit Parida and Joakim Wincent
Contrary to conventional wisdom, this study demonstrates that technological laggards and not industry front-runners are most likely to experience high rates of technological advancement in strategic alliances. We further suggest that imitation and not innovation is the primary source of such advancement, based on the fact that technological progress by laggards is most visible in industries that lack strong appropriability regimes. Finally, we present empirical evidence suggesting that lagging established corporations prefer to imitate from startups and not from fellow incumbents. These results are derived from a careful analysis of a longitudinal sample of over 150 incumbents with varying degrees of technological prowess that engage in partnerships with both startups and fellow incumbents across a wide representation of industries. Our chapter contributes to technological innovation, strategic alliance, entrepreneurship and imitation literatures, and provides non-trivial implications for startups.
Anders Broström and Maureen McKelvey
We examine how firms assess the value of R & D partnerships with two types of public research organizations: public research institutes (PRIs) and universities. Survey data on Swedish engineering and manufacturing firms suggest that contacts with universities provide firms with impulses to innovation and offer opportunities to learn to a higher extent that contacts with PRIs. Guided by a view of institutes as more oriented towards applied R & D than universities, we also test whether managers perceive institute contacts as contributing more strongly to short-term R & D projects than universities. This hypothesis cannot, however, be verified. Our results suggest that, in terms of perceived effects of R & D managers, PRIs and universities are more similar as collaboration partners than would be expected, given the differing institutional set-ups. Implications for current discussions about the role of PRIs in national research and innovation systems are discussed.
Martin G.A. Svensson
Empirical regularities regarding start-ups that do not show prolonged longevity have been known for some time. In this chapter, the regularity is argued to originate from an interaction between cognition-laden characteristics of entrepreneurs and contextual conditions. Overconfidence is argued to cause miscalibration of objective probabilities of success, which in turn causes excess entry, but also to negatively affect survival rates. Moreover, overconfidence is argued to be an evolutionary mechanism that helps explain the distribution of entrepreneurs at the local level. It does so by advocating overconfident entrepreneurs to be more likely to beacon personal, but miscalibrated, beliefs to others and thereby set off spillover effects. The bias is therefore argued to be detrimental to actors at an individual level (as it negatively affects survival rates), but favorable at the system level (as it facilitates spillover effects). The concluding discussion of these matters is extended by a discussion of policy issues.