Forces shaping firms' decision to innovate: evidence from large Australian organisations

Abstract

This paper investigates the forces that lead some firms to engage in more innovative activities than others using a survey of over 200 large Australian firms. Many earlier studies on the determinants of innovation followed the Schumpeterian tradition, and focused on size and market structure as possible causes of innovativeness, however with the event of new qualitative measures of industry knowledge and managerial styles, these factors have been found to be insignificant. The results show that factors common to all industries, such as the extent of learning, knowledge spillovers, appropriability and managerial style, are more important than industry specific forces. Foreign owned companies were also found to be more innovative, other things considered