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Subcontracting and firm growth: disentangling the effects of innovation type, level, and appropriability

Lookup NU author(s): Dr Jungho KimORCiD

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Abstract

This article investigates how innovation matters for the growth of subcontracting and non-subcontracting firms. In particular, it explores whether the effects of innovation type, level, and appropriability on firm growth differ between subcontractors and non-subcontractors. Data on Korean firms in the manufacturing sector are analysed. The impact of subcontracting on firm growth is found to be insignificant. In addition, the positive effect of the process innovation level on firm growth is found to be relatively greater for subcontractors, while the positive effect of the product innovation level on firm growth is found to be relatively greater for non-subcontractors. Innovation appropriability significantly increases firm growth for subcontractors only, not for non-subcontractors. These findings imply that firm-level heterogeneities in the suppler-buyer relationship, innovation goals and novelty, and the effectiveness of innovation protection jointly influence the impact of innovation on firm growth.

Publication metadata

Author(s): Kim J

Publication type: Article

Publication status: Published

Journal: Applied Economics Letters

Year: 2023

Volume: 30

Issue: 8

Pages: 1077-1081

Print publication date: 04/05/2023

Online publication date: 07/02/2022

Acceptance date: 01/02/2022

ISSN (print): 1350-4851

ISSN (electronic): 1466-4291

Publisher: Taylor and Francis

URL: https://doi.org/10.1080/13504851.2022.2036675

DOI: 10.1080/13504851.2022.2036675

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