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The paper seeks to identify and estimate the effects of knowledge flows and spillovers from R&D, exports, imports and FDI on the productivity of small and medium enterprises (SMEs). The study proposes a modified Cobb-Douglas production function using the CMIE PROWESS database to estimate the effects of knowledge flows of small firms from their own efforts and spillovers. The results are derived from generalized methods of moments estimator (GMM) and the SYS-GMM estimator. The study has been conducted separately for small enterprises (SEs) and medium enterprises (MEs). Knowledge flows from own R&D have unambiguous positive externality. The study presents evidence of a sizable positive spillover from exporting. It does not corroborate the theorized positive impact of FDI spillovers. It contributes to productivity spillover and knowledge management literature in small firms, establishing that R&D and other knowledge flows contribute to productivity through industry-wide spillover effects. The study arrives at a novel understanding of the impact of knowledge flows and spillovers through R&D and trade on SME productivity at the aggregate and disaggregate levels. It also presents counterintuitive results for the impact of FDI spillover on SME productivity. [ABSTRACT FROM AUTHOR]

The paper employs Probit Regression Model for small and medium enterprises (SMEs) to investigate the relationship between ‘access to finance’ and ‘type of innovation’, using firm-level dataset from the World Bank Enterprise Survey, covering 7,165 manufacturing firms from 23 states in India. The study indicates that ‘access to finance’ has a significant effect on the probability of firms’ decision to innovate. It is also significantly associated with the likelihood of firms’ decision to adopt a particular type of innovation, such as Product Innovation, Process Innovation, Organizational Innovation and Marketing Innovation. Several other structural characteristics of the firm are found to have significant effects on the innovation decision. The study would be of help to managers to understand how SMEs conduct their innovation decision process in response to the severity of obstacles to access to finance. [ABSTRACT FROM AUTHOR]