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Radical Innovation – A domain of SMEs? A novel test of the Schumpeterian Hypothesis

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  • Nabil Abou Lebdi,

    (CREA, Université de Luxembourg)

Abstract

The Schumpeterian Hypothesis has been subject to a plethora of research aiming at the provision of new insights to the relationship of innovation on firm size. Utilizing a panel of German companies in manufacturing industries from 1993-2011, this analysis explicitly distinguishes between radical and incremental innovation output. It reveals that firm size and radical innovation share an overall negative relationship, while the relationship between firm size and incremental innovation is positive. These results provide a novel explanation for the often-reported non-linear relationship between firm size and innovation.

Suggested Citation

  • Nabil Abou Lebdi,, 2015. "Radical Innovation – A domain of SMEs? A novel test of the Schumpeterian Hypothesis," DEM Discussion Paper Series 15-04, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:15-04
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    File URL: https://hdl.handle.net/10993/20936
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    References listed on IDEAS

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    More about this item

    Keywords

    SME; firm size; radical innovation; incremental innovation; manufacturing industry;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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