Determinants of innovation among manufacturing firms in a developing country: Insights from Indonesia
Yovita Isnasari, Puguh Prasetyoputra

1) Center for Innovation, Indonesian Institute of Sciences, Cibinong, Indonesia
2) Research Center for Population, Indonesian Institute of Sciences, Jakarta, Indonesia

Abstract

Many studies have examined the drivers of innovation among firms in developed settings. However, such studies in the context of Indonesia is limited. This study is aimed at investigating the determinants of innovation among firms in Indonesia. We use data from the World Bank Enterprise Survey (WBES), particularly the Indonesia dataset. We focus on the manufacturing firms which accounted for 1045 firms. We set product and process innovation as the dependent variables and fitted multivariable probit regression models. The results suggest that firms which are part of a larger group, have purchased patent, managed by female, and located in a large city have higher likelihood of product innovation. Moreover, firms which are part of a larger group, have purchased patent, conduct training, and have access to the internet are more likely to introduce process innovation. These information enrich the body of knowledge on innovation among firms. They are also useful for the Government of Indonesia for policy making purposes.

Keywords: Innovation, IP Management, SMEs, Indonesia

Topic: Innovation, IT, Operations and Supply Chain Management