Managerial Efficiency and the Schumpeterian Link Between Size, Market-structure and Innovation Revisited

This research uses a unique survey on innovation conducted in Belgian high-tech industries to investigate (a) the effects of managerial efficiency on the firm's innovative activity; and (b) the effects of controlling explicitly for managerial efficiency on the Schumpeterian-like relationship that firm size and market concentration are both conducive to innovation. The key findings are: managerial efficiency is an important determinant of the firm's innovation performance; only when one controls for managerial variables considered as success factors for innovation, the Schumpeterian effect of the impact of the firm's market share emerges for a wide range of measures of performance, which confirms Rothwell's suggestion [18] that small firms have a advantage in the management of their innovation.