The impact of R&D and information technology on innovation performance of Greek SMEs

Drawing on the resource-based view of the firm, investigation on the effects of internal resources and capabilities (R&D and technology) on small and medium-sized enterprises (SMEs) innovation performance is attempted. Using primary (survey-based) and financial data from 405 Greek manufacturing SMEs, new evidence on the impact of R&D activities, IT and other determinants such as ERP, size and exports on innovation performance is provided. It is found that IT (in terms of knowledge to quality management programs) enhanced positively on firm innovation performance, while R&D activities have no impact on firm innovation performance. In addition, absorptive capacity on innovation, access to finance, patents and firm size induce positively firm's innovation performance. The novelty of this study is the introduction of a proxy of innovation measuring overall innovation performance (both product and process innovation), computerisation of firm operation using ERP systems and investments in acquisition of knowledge about quality management programs as proxies of IT.