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Determinants of abandoning innovative activities: Evidence from Spanish firms

Garcia-Vega, Maria; Lopez, Alberto

Authors

Alberto Lopez



Abstract

We empirically analyse the effect of firms’ barriers to innovation on the probability of abandoning innovation projects. Specifically, we study factors related to the availability of finance, knowledge and market conditions. We use a sample of more than 8,300 innovative Spanish firms for the period 2005–2007. We find that all obstacles to innovation have a positive effect on the probability of abandoning innovative activities. Results show that market-related factors seem to be the most important determinants of innovation failure. Analyzing results by firm size, we find that, for small-medium firms, the main factors that lead to abandoning innovative projects are competition from established firms and market uncertainty. In contrast, for large firms, the most important barriers are the lack of qualified personnel and the availability of external finance. These results might suggest that large and small-medium firms differ in the scale and complexity of their innovative projects.

Citation

Garcia-Vega, M., & Lopez, A. (2010). Determinants of abandoning innovative activities: Evidence from Spanish firms. Cuadernos de Economía y Dirección de la Empresa, 13(45), 69-91. https://doi.org/10.1016/S1138-5758%2810%2970024-4

Journal Article Type Article
Acceptance Date Nov 15, 2010
Online Publication Date Dec 16, 2011
Publication Date Dec 1, 2010
Deposit Date Sep 6, 2024
Print ISSN 1138-5758
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 13
Issue 45
Pages 69-91
DOI https://doi.org/10.1016/S1138-5758%2810%2970024-4
Keywords Innovation failure, Barriers to innovation, Firm heterogeneity
Public URL https://nottingham-repository.worktribe.com/output/39174664
Publisher URL https://www.sciencedirect.com/science/article/pii/S1138575810700244?ref=pdf_download&fr=RR-2&rr=8bedc954e9114179
Additional Information Volume 13, Issue 45
, December 2010, Pages 69-91