Measuring firm-level innovation using short questionnaires: evidence from an experiment

Abstract

Little is known about innovation in
\n developing countries, partly because of the lack of
\n comparable and reliable data. Collecting data on firm-level
\n innovation is challenging because of the subjective
\n definition of what determines an innovation, a problem that
\n is exacerbated in developing countries where innovation is
\n likely to be more incremental and less radical. This paper
\n contributes to the literature by presenting the results of
\n an experiment aiming to identify the survey instrument that
\n better captures firm-level innovation in developing
\n countries. The paper shows that a small set of questions
\n included in a multi-topic, firm-level survey does not
\n provide an accurate picture of firm-level innovation and
\n tends to overestimate innovation rates. Issues related to
\n framing explain some of the unreliability of innovation
\n responses, while cognitive problems do not appear to play a
\n significant role.