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WP/03 Importance of Technological Innovation for SME Growth: Evidence from India

This paper probes the drivers, dimensions, achievements, and outcomes of technological innovations carried out by SMEs in the auto components, electronics, and machine tool sectors of Bangalore in India. Further, it ascertains the growth rates of innovative SMEs vis-à-vis non-innovative SMEs in terms of sales turnover, employment, and investment. Thereafter, it probes the relationship between innovation and growth of SMEs by (i) estimating a correlation between innovation sales and sales growth, (ii) calculating innovation sales for high, medium, and low growth innovative SMEs and doing a one-way ANOVA, and (iii) ascertaining the influence of innovation sales, along with investment growth and employment growth on gross value-added growth by means of multiple regression analysis. The paper brings out substantial evidence to argue that innovations of SMEs contributed to their growth.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2010/03
Title:
WP/03 Importance of Technological Innovation for SME Growth: Evidence from India
Authors:
M. H. Bala Subrahmanya, M. Mathirajan, and K. N. Krishnaswamy
Publication date:
January 2010
ISBN 13 Web:
978-92-9230-238-2
Copyright holder:
© UNU-WIDER
Copyright year:
2010
Keywords:
technological innovations, sales growth, auto components, electronics, machine tools, Bangalore
JEL:
L25, L26
Project:
Promoting Entrepreneurial Capacity
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the project by the Finnish Ministry for Foreign Affairs, and the financial contributions to the research programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Finnish Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development).
Format:
online and printed copies