The Journal of Technology Transfer

, Volume 43, Issue 2, pp 316–342 | Cite as

The innovation activities of small and medium-sized enterprises and their growth: quantile regression analysis and structural equation modeling

  • SooGeun Ahn
  • Jeewhan Yoon
  • YoungJun Kim


Using an augmented version of Gibrat’s law, we theorized the relationship between the innovation activities of small and medium-sized enterprises (SMEs) and their growth in sales, firm value, and research and development (R&D) investment in the following years. Based on 17 years of data from 598 SMEs in South Korea, this study examined the mediating role of sales growth and firm value growth in the relationship between innovation activities and R&D investment growth in a longitudinal setting. The study findings suggested that the innovation activities of SMEs at Time 1 influenced the sales growth of high-growth firms and high-tech sectors at Time 2 more positively than that of low-growth firms and low-tech sectors, and that SMEs consequently invested more in R&D at Time 3. However, the innovation activities of SMEs at Time 1 did not significantly affect their firm value growth at Time 2. Theoretical and managerial implications are discussed for scholars, managers, and policy makers.


Innovation activities Firm growth R&D Quantile regression Small and medium-sized enterprises 

JEL Classification




The authors would like to thank the editor and anonymous reviewers for their considerable help in developing this manuscript. This manuscript was supported by a Korea University Grant. Please send theoretical inquiries to the corresponding author, Jeewhan Yoon (Email: and send analytical inquiries to the cocorresponding author, YoungJun Kim (Email:


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© Springer Science+Business Media New York 2017

Authors and Affiliations

  1. 1.Graduate School of Management of TechnologyKorea UniversitySeoulSouth Korea

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