Measuring Firm-Level Innovation Using Short Questionnaires: Evidence from an Experiment
Policy Research Working Papers
Little is known about innovation in developing countries, partly because of the lack of comparable and reliable data. Collecting data on firm-level innovation is challenging because of the subjective definition of what determines an innovation, a problem that is exacerbated in developing countries where innovation is likely to be more incremental and less radical. This paper contributes to the literature by presenting the results of an experiment aiming to identify the survey instrument that
... instrument that better captures firm-level innovation in developing countries. The paper shows that a small set of questions included in a multi-topic, firm-level survey does not provide an accurate picture of firm-level innovation and tends to overestimate innovation rates. Issues related to framing explain some of the unreliability of innovation responses, while cognitive problems do not appear to play a significant role. ). We would to thank Jorge Luis Rodriguez Meza and the participants in seminars at the World Bank and OECD for their suggestions and comments. We would also like to thank Xie Huang for excellent research assistance, Leonard Sabetti for his valuable and detailed work with the verification of the innovation descriptions, and Amanda Franziska Zarka for her comments. We thank the UK Department for International Development (DFID) for the financial support provided to DECEA for collecting data on innovation in developing countries.