Determinants of Product Innovation in Small Firms

Abstract

Many studies have investigated the determinants of product innovation in small firms, suggesting product, firm, market and innovation process factors are its key drivers of success. Variations across industries relating to the determinants of product innovation are often expected, but due to a lack of data this is still under-researched. This article explores if composite effects due to broad samples indeed blur one's view. Drawing upon a database of 1250 small firms across 7 industries, we investigate if any differences are found in the presence and impact of various firm-level determinants. Controlling for size and age differences, the analysis reveals some major differences to the extent small firms use innovative practices, and their connection with new product introductions.