Innovation through R&D activities in the European context: antecedents and consequences
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Innovation through R&D activities in the European context: antecedents and consequences David Urbano1 · Andreu Turro1 · Sebastian Aparicio2,3
© Springer Science+Business Media, LLC, part of Springer Nature 2019
Abstract Despite the fact that the determinants and the consequences of R&D activities have been extensively studied in previous research, further efforts to integrate disparate streams of literature might bring new insights into innovation decision-making by firms. In particular, this article studies the simultaneous effects that a set of factors (at both company and environmental levels of analysis) have on R&D activity, which explain firm growth. A twostage probit least squares (2SPLS) estimation is applied to data from the EU-EFIGE/Bruegel-UniCredit dataset for seven European countries for the years 2007–2009. The main findings show that not all the R&D determinants lead to firm growth. In particular, R&D activities are affected by the employment of a significant number of foreign executives, a higher percentage of employees with fixed-term contracts, appropriate labour regulations and access to employees who have received external training, all of which are positively related to firm growth. Based on these results, policy and practical implications to improve firms’ performances are discussed. Keywords R&D management · Firm growth · Innovation · Institutional economics · Resource-based theory JEL Classification L2 · M1 · O32 · J6 · B52
* David Urbano [email protected] Andreu Turro [email protected] Sebastian Aparicio [email protected] 1
Department of Business and Centre for Entrepreneurship and Social Innovation Research (CREIS), Universitat Autònoma de Barcelona, Barcelona, Spain
2
Durham University Business School, Durham University, Durham, UK
3
Fundación ECSIM, Medellin, Colombia
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D. Urbano et al.
1 Introduction It has been recognised that investments in R&D activities can have a positive effect on firm performance and on economic growth (Aghion and Howitt 1992; Grossman and Helpman 1991). For this reason, a significant number of studies have examined how R&D activities are influenced by several factors, such as: a firm’s industry (Scherer 1984); public policy instruments (Becker 2015); national institutions (Judge et al. 2015); access to informal networks (Reagans and McEvily 2003); corporate strategy (Baysinger and Hoskisson 1989); firm size (Revilla and Fernández 2012); access to company resources (Del Canto and Gonzalez 1999) and organizational slack (Alessandri and Pattit 2014); CEO characteristics and leadership style (Barker and Mueller 2002); and employees’ absorptive capacity and knowledge (Kang and Lee 2017); among others. Although the literature is diverse, two different but strong streams of research on the antecedents of R&D activity are highlighted, namely, economics and management (Griffiths and Webster 2010; Teece 2018). On the one hand, from an economic perspective, the emphasis tends to be placed on the effect of externa
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