Document Type


Publication Date


Publication Title

Review of Industrial Organization


Department of Economics


The Schumpeterian hypothesis about the effect of firm size on research and development (R&D) output is studied for a sample of R&D projects for R&D-intensive firms that are small but have substantial variance in their sizes. Across the distribution of firm sizes, the elasticity of patenting with respect to R&D ranged from 0.41 to 0.55, with the elasticities being largest for intermediate levels of firm size and also varying directly with the extent to which the projects are Schumpeterian in the cost or value senses. The paper’s findings at the R&D project level are compared with the literature’s findings at the line of business, firm, and industry levels, and the findings are consistent with the literature’s findings for small firms.




This is a post-peer-review, pre-copyedit version of an article published in Review of Industrial Organization. The final authenticated version is available online at:

Review of Industrial Organization

Original Citation

Link, A.N., Scott, J.T. Propensity to Patent and Firm Size for Small R&D-Intensive Firms. Rev Ind Organ 52, 561–587 (2018).

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