Founder-Involvement in R&D and SMEs Performance

Abstract

Objectives . The aim of the paper is to shed light on the pivotal role of founders’ involvement in R&D and its reflexes on SMEs performance. Methodology . A conceptual framework was outlined and operationalized in terms of a mediation/moderation model. Hypotheses were developed and tested it on a random sample of 350 SMEs locate in low research-intensive areas of Southern Italy. An augmented cross-sectional design, which measures key variables using different sources at different time points, was employed. We adopted a seemingly unrelated regression to jointly analyze variables and their interactions. Findings . We observe that founders’ involvement in R&D influence positively SMEs’ performance. We also found evidence that founders’ involvement in R&D-SMEs performance association is mediated by R&D resources, Quality of the technological knowledge, and innovation outputs. At the same time the R&D resources - Quality of the technological knowledge association is positively moderated by the share of R&D subsidies. Research limits . Our study is affected by various limitations. As an example, only revenue-based measures are used as a proxy of firm performance. In addition, for controlling heterogeneity in estimates, data refer to a well-defined time window as well as to manufacturing SMEs located in specific low-research intensity geographic areas of Italy. Practical implications . Our study reveals that founders - with their firm-and context-specific capabilities - while enmeshed with R&D activities, contribute to SMEs performance. Policy makers should create incentives for founders to be involved to some extent in inventive activities. Further implications are also envisaged for both funding and training educational services. Originality of the study . Building on the intersection between resource orchestration and competence-based perspectives, we conceived and empirically analyzed founders as key actors for inventive resource orchestration at the firm level and how and under what conditions the resource orchestration made by founders is likely to nurture the performance even of low research-intensive SMEs.