Studies of the determinants and effects of innovation commonly make an assumption about the way in which firms make the decision to innovate, but rarely test this assumption. Using a panel of Irish manufacturing firms we test the performance of two alternative models of the innovation decision, and find that a two-stage model (the firm decides whether to innovate, then whether to perform product only, process only or both) outperforms a one-stage, simultaneous model. We also find that external knowledge sourcing affects the innovation decision and the type of innovation undertaken in a way not previously recognised in the literature. © 2007 Elsevier Ltd. All rights reserved.
|Number of pages||8|
|Publication status||Published - Dec 2007|
Bibliographical noteNOTICE: this is the author’s version of a work that was accepted for publication in Technovation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Du, J, Love, JH & Roper, S, 'The innovation decision: an economic analysis' Technovation, vol. 27, no. 12 (2007) DOI http://dx.doi.org/10.1016/j.technovation.2007.05.008