Using novel data on European firms, this paper investigates the relationship between business groups and innovation … group affiliation is particularly important for innovation in industries that rely more on external funding and in groups … knowledge spillovers are not the main driver of innovation in business groups because firms affiliated with the same group do …

account firm heterogeneity. We find support for the prediction that competition has a negative effect on innovation … important channels for domestic firm innovation. We do not find support for the inverted U effect of competition on innovation …. There is partial support for the hypothesis that firms in a more pro-business environment invest more in innovation and are …

property invention plays. Then we examine the role of Internetand communications technologies and comment on innovation in this …