Studies about this relationship focusing on microdata have also developed an extensive
literature5, some of the articles using Spanish data. Farinas et al (1992) or Calvo (2000a;
2000b), among others, have analysed, at firm level, the negative relationship between size and
innovation effort, meanwhile Calvo (2003, 2004) have tested the positive interaction between
innovation and firms behaviour, focusing on employment growth and export activity.
Two theoretical assumptions can be extracted from the literature mentioned, and be tested in
this article: a) there is a negative relationship between firms’ size and their growth, especially
in employment terms. Or, small firms grow faster than large ones. This supposition has a
direct translation to regional analysis: regions with the highest share of small and medium size
firms should be the ones with the highest growth; and b) there should be a negative
relationship between firms’ size and innovation activity, and, following a) assumption, a
positive interaction between innovation and the growth of firms. In other words, small
innovators grow faster. The application of this assumption to regional economics is also clear:
Those regions with a higher innovative attitude should be the ones with a better economic
evolution.
The present article tests both theoretical conjetures from two complementary points of view:
first of all, it studies the relationship, for seventeen Spanish regions, between industrial
evolution and the share of small firms and the presence of high and medium-high
technological industries; secondly, it introduces microdata in order to know if the assumptions
made are true at microeconomic level. In this second stage, regional variables are also
included in order to find if regional aspects play a role in the survival and growth of firms.
The article is structured as follows: its second section describes the relationship between the
evolution of employment and productivity in Spanish regions and the industrial structure,
focusing on the role played by small and medium size firms presence; the third section relates
innovation, measured as the share of high and medium-high technological industries, and
Spanish regional growth; the fourth section introduces microlevel data in order to estimate the
significance of size and innovation in the employment growth of firms, also including
regional variables for better explain the changes in employment. The estimation follows a
5 Licht and Nerlinger (1998); Storey and Tether (1998); Almus and Nerlinger (1999, 2000); or Freel (2000).