Lederman, Daniel2012-03-192012-03-192009-02-01https://hdl.handle.net/10986/4036It is so widely recognized that innovation is a key driver of economic growth that it is cliché to say so. This article studies product innovation by firms with data from 68 countries, covering more than 25,000 firms in eight manufacturing sectors. The author assesses the predictions of inter-disciplinary research on innovation by firms. The econometric evidence suggests that globalization and local knowledge increase the likelihood that firms will introduce new products. By contrast, domestic regulatory impediments to competition are not robustly correlated with product innovation.CC BY 3.0 IGOBUSINESS ACTIVITIESBUSINESS ENVIRONMENTCAPABILITIESCAPACITY UTILIZATIONCOMPETITORSCONFIDENCE INTERVALSCREATIVE DESTRUCTIONDESCRIPTIVE STATISTICSDISCOVERYDIVERSIFICATIONDUMMY VARIABLESECONOMIC ACTIVITIESECONOMIC DEVELOPMENTENTERPRISE SURVEYSENTREPRENEURSHIPEXOGENOUS FACTORSEXPORT SECTORFACTOR ANALYSISFINANCIAL SUPPORTFIRM PERFORMANCEFIRM SIZEFOREIGN DIRECT INVESTMENTFOREIGN INVESTMENTGLOBAL BUSINESSGLOBALIZATIONHYPOTHESESIDEAINCUMBENTSINDIVIDUAL FIRMINITIAL PUBLIC OFFERINGSINNOVATION EFFORTSINNOVATION INDICATORSINNOVATION OUTCOMESINNOVATIONSINNOVATIVE FIRMINNOVATIVE FIRMSINNOVATIVE IDEASINTEGRATIONINTERNATIONAL BUSINESSINTERNATIONAL TRADEINVESTMENTS IN INNOVATIONJOINT VENTURESLICENSELICENSINGMANUFACTURINGMANUFACTURING INDUSTRIESMANUFACTURING INDUSTRYMARKET COMPETITIONMARKET SHAREMATRICESMISSING OBSERVATIONSMISSING VALUESMNCMNEMULTINATIONALMULTINATIONAL CORPORATIONSMULTINATIONAL ENTERPRISESNEW ENTRANTSNEW IDEASNEW PRODUCTNEW PRODUCTSORGANIZATIONAL LEARNINGORGANIZATIONAL STRUCTUREORGANIZATIONAL STRUCTURESPARENT COMPANIESPERFORMANCESPRECISIONPREDICTIONSPRINCIPAL COMPONENTS ANALYSISPRIVATE SECTORPROBABILITIESPROBABILITYPROCESS INNOVATIONPRODUCT INNOVATIONPRODUCT INNOVATIONSPRODUCTIVITIESPRODUCTIVITYPUBLIC POLICYR&DREGULATORY ENVIRONMENTREGULATORY REFORMSREPRESENTATIVE SAMPLESRESULTRESULTSSIZE OF FIRMSSTANDARD DEVIATIONSTANDARD DEVIATIONSSTANDARD ERRORSSTATISTICAL SIGNIFICANCETECHNOLOGY DIFFUSIONTELEPHONETELEPHONE LINESUSESVALIDITYWEBWorld Bank10.1596/1813-9450-4840