Scale, R&d Performance and Idea Profiles for New Products: A Comparative Study of U.S. and German Manufacturing Firms

ABSTRACT The literature remains inconsistent in theory and findings on research inputs: small, medium or large firms are more efficient in their use of scarce technical resources depending upon your view and data. Further complicating this debate is the notion of diminishing returns to scale on RD they can exploit capital markets better than smaller firms; as well as economies of scale and scope in the actual conduct of research (Henderson and Cockburn, 1996, p. 33). They support their argument on scale economies and knowledge spillovers with data from 10 pharmaceutical firms. Neither view takes into account small and large firm partnerships which could enhance RD Tsai, 2005). Further, industry differences can significantly moderate this effect (Audretsch, 2001,2002). Perhaps what is least well understood about the efficiency argument is the way in which this actually operates to produce innovative outcomes. …