Firm size and the nature of innovation within industries: The case of process and product R&D

Journal Article (Journal Article)

The effect of firm size on the allocation of R&D effort between process and product innovation is examined. It is hypothesized that relative to product innovations, process innovations are less saleable in disembodied form and spawn less growth. This implies that the returns to process R&D will depend more on the firm's output at the time it conducts its R&D than the returns to product R&D. Incorporating this distinction in a simple model, we derive and test predictions about how the fraction of R&D devoted to process innovation varies with firm size within industries.

Full Text

Duke Authors

Cited Authors

  • Cohen, WM; Klepper, S

Published Date

  • January 1, 1996

Published In

Volume / Issue

  • 78 / 2

Start / End Page

  • 232 - 243

International Standard Serial Number (ISSN)

  • 0034-6535

Digital Object Identifier (DOI)

  • 10.2307/2109925

Citation Source

  • Scopus