Abstract
We test the hypothesis that large firms devote a higher proportion of their research and development (R & D) expenditure on process innovation thansmaller firms. According to the estimates, process- and product R & D expenditure rise less than in proportion to size. The size effect is somewhat stronger for process R & D but the difference to product R & D is in no way dramatic. This difference with regard to size elasticity of process- and product R & D is somewhat more pronounced when accounting for possible interrelationships between expenditure on process- and product R & D but remains statistically non-significant.
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Fritsch, M., Meschede, M. Product Innovation, Process Innovation, and Size. Review of Industrial Organization 19, 335–350 (2001). https://doi.org/10.1023/A:1011856020135
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DOI: https://doi.org/10.1023/A:1011856020135