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An international multilevel analysis of product innovation


Author Info

  • Daniel Lederman

    (Development Economics Research Group, The World Bank, Washington, DC, USA)


This paper studies multilevel determinants of product innovation by incumbent firms with data from 68 countries, covering over 25,000 firms in eight manufacturing sectors. The author assesses the predictions of interdisciplinary research on firm behavior in different contexts, which have emphasized that product innovation is affected by three sets of factors: the extent of global engagement, information spillovers, and market structure. The empirical model of the probability of observing a product innovation, a probit model, by a firm considers three levels of analysis: firm characteristics, industry characteristics, and the national context. The econometric evidence supports the global engagement and information spillovers hypotheses, but the evidence on the role of market structure is mixed. Regarding global engagement, the evidence suggests that product innovation by incumbent firms is positively correlated with the act of investing in R&D and licensing of foreign technologies, and country-level average import tariffs reduce the probability of product innovation. Regarding information spillovers, the evidence also shows that a country's patent density is positively correlated with product innovation. In contrast, concerning the market structure hypotheses, country-level indicators of business density and of policy-induced costs of entry are not robustly correlated with product innovation.

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Journal of International Business Studies.

Volume (Year): 41 (2010)
Issue (Month): 4 (May)
Pages: 606-619

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Handle: RePEc:pal:jintbs:v:41:y:2010:i:4:p:606-619

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Cited by:
  1. Martin Srholec, 2008. "A multilevel analysis of innovation in developing countries," Working Papers on Innovation Studies, Centre for Technology, Innovation and Culture, University of Oslo 20080812, Centre for Technology, Innovation and Culture, University of Oslo.
  2. Onisor Lucian-Florin, 2012. "Marketing And Innovation: Young People'S Attitude Towards New Products," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1179-1186, July.
  3. Shepherd, Ben & Stone, Susan, 2012. "Imported intermediates, innovation, and product scope: Firm-level evidence from developing countries," MPRA Paper 41704, University Library of Munich, Germany.
  4. ONISOR Lucian-Florin & CRISTEA Silvia-Lucia, 2012. "Correlation Of Legal Aspects And Marketing Techniques In The Granting Process Of Patents, Trade Marks And Copyright In Romania, The European Community, United States Of America, Japan And Korea," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 0(3), pages 288-295.
  5. Melnyk, Valentyna & Giarratana, Marco & Torres, Anna, 2014. "Marking your trade: Cultural factors in the prolongation of trademarks," Journal of Business Research, Elsevier, Elsevier, vol. 67(4), pages 478-485.
  6. Liu, Xiaohui & Hodgkinson, Ian R. & Chuang, Fu-Mei, 2014. "Foreign competition, domestic knowledge base and innovation activities: Evidence from Chinese high-tech industries," Research Policy, Elsevier, Elsevier, vol. 43(2), pages 414-422.
  7. Barros, Henrique M., 2011. "The Effects of Innovation Partnership, Foreign Ownership and Enhanced Management Practices on the Use of Patents in Brazilian Manufacturing," Insper Working Papers, Insper Working Paper, Insper Instituto de Ensino e Pesquisa wpe_255, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.


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