In Search of the Deep Determinants of Firm-Level Innovation : New Evidence from Developing Countries

This article examines the deep determinants of firm-level innovation in developing countries to understand why firms in these economies exhibit different propensities to innovate. The hypotheses are empirically tested using a representative sample of 10,500 small, medium and large firms across manufacturing, retail and other service sectors from 14 developing countries. The study employs Bayesian Model Averaging to overcome the issue of model uncertainty. Our analysis presents new evidence to show that only variables capturing innovation efforts and technological capabilities at the firm- and country- levels can be classified as deep determinants of innovation