Research On The Relationship Between Firm Size And Technical Innovation

Technical innovation is the primary measure combining science and economy and the core of innovation system in a country. Because firms are the principal part of technical innovation, it is important to study technical innovation in firms. Firm size has been a basilic factor influencing technical innovation in firm since"Schumpeterian hypothesis"in 1942. But up to now, the relationship between firm size and technical innovation hasn't achieved a certain conclusion.After a series of theoretical analysis, this paper applies the nonparametric regression estimation procedure to the analysis of the innovation-firm size relationship using firms data from Chinese ITTOP100 web and UK DTI web. Then on the basis of theoretical analysis and empirical analysis, the paper achieves a conclusion: the SMEs have stronger preference to innovate than the large firms, and R&D trends to keep a fixed rate to sales revenue when the firms achieve a certain size. According the conclusion and the actual situation of domestic and foreign firms in technical innovation, the paper proposes that we should increase support for SMEs in technical innovation in China. At last, the paper proposes workable policy from financing system, legal system, and taxation system to social service system.