Innovation through R&D activities in the European context: antecedents and consequences

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 two-stage 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.

Market-oriented business model for SMEs' disruptive innovations internationalization

“…Companies can develop innovations driven by external expert demands without having developed the necessary internal capacity built on innovativeness. Urbano et al (2019) argue that access to resources, appropriate organizational structure and strategies to ensure capacity building of employees through training influence firms' innovativeness. While focusing too much on innovation, companies can underestimate the importance of understanding customer needs and willingness to buy.…”

“…Innovativeness can be defined as an organizational ability to attain new thinking and openness to new ideas and how to implement learning capacity (Hult et al , 2004; Bose, 2016). Innovativeness influences developing knowledge of the market via market research, advertising and promotion (Miller and Friesen, 1978), which requires strategic planning, knowledge and openness to new organizational solutions and ideas (Hult et al , 2004; Urbano et al , 2019). According to Zehir et al (2011), innovativeness could be seen as a systems-based, firm-wide orientation related to innovations.…”

“…Far-seeing, innovative firms understand how to develop knowledge-based structures consisting of organization-wide shared beliefs that guide them strategically in actions (Zehir et al , 2011). Innovations and capacity to innovate have positive influence on SMEs internationalization and competitive performance (Urbano et al , 2019; Radicic and Djalilov, 2019). Bose (2016) specifies that innovation is important to safeguard SMEs against ever-increasing competition and customer demand.…”

“…This process is crucial to gaining customer acceptance of the innovation (Menguc and Auh, 2008). Innovativeness may arise based on a willingness and commitment to master the latest products or technological services (Liao et al , 2011; Urbano et al , 2019). For successful internationalization, it is not enough to develop an innovation; SMEs also need internal expertise and openness to meet international requirements (Bose, 2016; Radicic and Djalilov, 2019) and develop knowledge of the market, for instance by market research, advertising and promotion (Miller and Friesen, 1978), which requires strategic planning and coordination (Hult et al , 2004; Bose, 2016).…”

From Entrepreneurial Intentions to Entrepreneurial Behavior

“…This follows similar approaches in entrepreneurship research (cf. Urbano, Turro, & Aparicio, 2019), particularly regarding entrepreneurial intentions (cf. Schmutzler, Andonova, & Diaz-Serrano, 2019).…”