Externally funded project
Innovation and Entrepreneurship Research

SFB / TRR 190

Within the collaborative research center “Sonderforschungsbereich/Transregio 190 Rationality and Competition” funded by the Deutsche Forschungsgemeinschaft (DFG), the department of innovation and entrepreneurship research of the Max Planck Institute for Innovation and Competition is represented with the sub-project B04. The sub-project investigates the economic decisions taken by SMEs, in particular those related to innovation activities. The special research project has been granted funding from the DFG until 2020 and will be carried out in cooperation with the LMU Munich, HU Berlin, TU Berlin, ifo Institute, European School of Management and Technology, the DIW Berlin, and the Berlin Social Science Center.

A prevalent notion in the German economic policy debate is that much of Germany’s economic success is owed to the innovative performance of its small and medium sized enterprises (SMEs). However, SMEs are very heterogeneous, and very little is known about which types of SMEs contribute most to innovation and why. Many SMEs, but not all, are owner-managed. They are often referred to as family firms. Some, like start-ups, are small because they are young, but their owners have the ambition to grow the enterprises quickly if possible. Others are small because their owners choose to remain so. Whether such choices are driven by rational decision-making or by non-orthodox preferences is largely unknown, as behavioral economics has not been applied systematically to this field. This projects aims to study investment and innovation by SMEs in order to clarify if behavioral variables add explanatory power.

Official Page SFB
Official Page SFB - Project B04