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Globalisation of Innovation in SMEs: Why They Go Abroad and What They Bring Back Home

Author

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  • Christian Rammer
  • Anja Schmiele

Abstract

This paper investigates the drivers and the effects of the internationalisation of innovation activities in SMEs based on a large data set of German firms. We look at different stages of the innovation process (R&D, design, production and sales of new products, and implementation of new processes) and explore the role of internal resources, home market competition and innovation-related location advantages for an SME’s decision to engage in innovation activities abroad. By linking international innovation activities to firm growth in the home market we try to identify likely internationalisation effects at the firm level. The results show that export experience and experience in knowledge protection are highly important for international innovation activities of SMEs. High innovation costs at home stimulate internationalisation of non-R&D innovation activities, and shortage of qualified labour expels production of new products. R&D activities abroad and exports of new products spur firm growth in the home market.COMMENT: Axel Mangelsdorf

Suggested Citation

  • Christian Rammer & Anja Schmiele, 2008. "Globalisation of Innovation in SMEs: Why They Go Abroad and What They Bring Back Home," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 59(Supplemen), pages 173-212.
    • Handle: RePEc:aeq:aeqaeq:v59_y2008_is_q5_p173-212
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    More about this item

    Keywords

    Internationalisation of Innovation; Globalisation; SMEs; Effects of Innovation; Absorptive Capacities; Market Structure.;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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