An Empirical Model to Measure Research and Development's Impact on SMEs' Manufacturing Production Growth
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This study intends to construct and validate an empirical model to measure the impact of research and development (R&D) contribution on production growth within Small and Medium-sized Enterprises (SMEs) in the manufacturing sector. Though its confidence is well known, the specific role that good R&D plays in company growth and productivity has not been clearly defined. To fill this gap, this study suggests a novel method for identifying and quantifying the impact of R&D on the production of SMEs. Short-term production is used to design and rebuild a mathematical model based on the production growth theory findings from the literature review. By adding R&D as an input, the rebuilt model is improved. To test the model's effectiveness, we collected input-output data from 15 machinery manufacturing SMEs over a four-year period. Our findings demonstrate a statistically confidence contribution of R&D to production growth in 11out of 15 machinery manufacturing SMEs, with a 95% confidence levels significant at (p-value <0.05). This effect size serves as our best estimate of the impact's size within the broader population of machinery manufacturing SMEs. The robustness of these results highlights the model's value in assessing the contribution of R&D to production growth, particularly in the machinery manufacturing sector. The study's novelty lies in its introduction of a new quantitative framework to the manufacturing domain, potentially advancing our understanding of the role of R&D in firm performance. By providing a method to measure this previously intangible factor, our model offers both theoretical insights and practical implications for manufacturing SMEs seeking to optimize their R&D strategies for enhanced growth. This research contributes to bridging the gap between R&D theory and quantifiable business outcomes, offering a valuable tool for both academics and practitioners in the field of manufacturing development.
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Copyright (c) 2025 Abdalla Omar Dagroum Ali, Houssein. M.A. Elaswad
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