Firm size and dynamic technological innovation

Competitive strategy can be influenced by technological change and technological innovation over time, a process we refer to as dynamic innovation. Using data from the computer modem industry, we examine the relationship between firm size and dynamic innovation. Innovation performance is represented by the technological performance of the outputs of the firm's innovation process, namely new products developed by the firm. In contrast, the extant literature typically considers the relationship between size and innovation at a single point in time, and innovation performance is generally characterized by the productivity of the innovation process. Our findings indicate that smaller firms in the computer modem industry exhibit higher levels of dynamic innovation performance. (C) 2002 Elsevier Science Ltd. All rights reserved.