Download This PaperDoes Innovation Make (SME) Firms More Productive?
88. Palangkaraya, A., Spurling, T. and Webster, E. (2015) ‘Does Innovation Make (SME) Firms More Productive?’ in Small Business Conditions and Finance, eds Angus Moore and John Simon, Reserve Bank of Australia, 181-199
18 Pages Posted: 18 Nov 2021
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Does Innovation Make (SME) Firms More Productive?
Does Innovation Make (SME) Firms More Productive?
Date Written: January 19, 2016
Abstract
There is no shortage of dialogues and commentaries extolling the need for more innovation to
regenerate sagging national productivity growth. However, hard evidence on whether or not
innovation makes a difference is largely absent because most firm-level studies are drawn from
cross-sectional data which cannot disentangle cause and effect.
We use a panel of approximately 7 000 Australian small to medium-sized enterprises (SMEs), over a five-year period, to estimate the effect of introducing a new product, or new managerial, operational or marketing method on the firm’s future productivity. In our context, we define these as changes that were new to the firm, rather than new to the world. Over and above innovation, we also test for whether collaborative arrangements with external parties make further contributions to firm
productivity.
Keywords: Innovation; SMEs; productivity
JEL Classification: O31; O33
Suggested Citation: Suggested Citation
University of Melbourne - Melbourne Institute: Applied Economic & Social Research ( email )
Level 5, FBE Building, 111 Barry Street
Parkville, Victoria 3010
Australia
Alfons Palangkaraya
Centre for Transformative Innovation, Faculty of Business and Law, Swinburne University of Technology ( email )
AGSE Building
Room 117
Hawthorne, Victoria 3121
Australia
+61392145826 (Phone)