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Innovations and Growth: Evidence from Finnish SMEs

Author

Listed:
  • Timo Tohmo

    (Jyvaskyla University School of Business and Economics, JSBE, P. O. Box 35, 40014 University of Jyvaskyla, Finland)

  • Esa Storhammar

    (Jyvaskyla University School of Business and Economics, JSBE, P. O. Box 35, 40014 University of Jyvaskyla, Finland)

Abstract

The purpose of this study is to clarify the factors that affect the ability of small and medium-sized enterprises (SMEs) to create innovations that promote firm growth. Studies regarding the relationship between research intensity and growth have typically produced mixed results, revealing a modest or non-existent influence of innovations on sales growth. These studies have typically used patents as indicators of innovation. We directly asked firms whether their innovations had affected their growth, and we regressed the results over several variables, covering a wide range of dimensions related to (1) personal factors, (2) firm-related factors (including questions that reflect a firm’s innovation strategies), and (3) regional factors. Our analyses of Finnish SMEs revealed that trust, innovation activities and networking are essential components of firms’ ability to create innovations that contribute to high firm growth. A multinomial logistic regression analysis also provided support for the assumption that age, technological level and firm location affect firm performance.

Suggested Citation

  • Timo Tohmo & Esa Storhammar, 2019. "Innovations and Growth: Evidence from Finnish SMEs," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 27(03), pages 229-257, September.
    • Handle: RePEc:wsi:jecxxx:v:27:y:2019:i:03:n:s0218495819500092
    DOI: 10.1142/S0218495819500092
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    Cited by:

    1. Malmström Malin & Öqvist Anna, 2024. "Constructing an Entrepreneurial Identity: How Enterprise Intentions Among Young People are Motivationally Formed," Entrepreneurship Research Journal, De Gruyter, vol. 14(1), pages 187-224, January.

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    Keywords

    Innovation; growth; SMEs;
    All these keywords.

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