The aim of this paper is to analyze different size threshold structures of firm productivity on business performance by employing a panel of 40 Taiwanese biotech industry firms over the period 2008–2017. Whereas size expansion and performance have an inverted U-shaped relationship, the results show that size expansion is negative for business performance. We find that the productivity of individual firms has different effects, in which we observe that most small-size firms and large-size firms between heterogeneity of the impact of the performance, productivity and innovation and show that large-size firms' productivity and innovation capability are lower than those of small-size firms. For management policy, we recommend that large-size firms strengthen their management of productivity and innovation capabilities and actively improve the performance of productive forces and enhance the contribution of innovation.
- Inverted U-Shaped relationship
- Management policy
- Non-linear model
- Size threshold