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Industry and country effects on innovation effort

Mariano Nieto (CUNEF, Madrid, Spain) (Universidad de León, León, Spain)
Daniel Alonso-Martínez (Universidad de León, León, Spain)
Nuria González-Álvarez (Universidad de León, León, Spain)

European Journal of Innovation Management

ISSN: 1460-1060

Article publication date: 1 December 2020

Issue publication date: 3 January 2022




The purpose of the paper is to study the determinants of firms' innovation effort using the main approaches in strategic management. The authors specifically analyze the joint effects of industry structure and country characteristics on innovation effort while controlling for firm resources.


The hypotheses proposed are tested using a data set that includes firms registered in the EU Industrial R&D Investment (IRI) Scoreboard (European Commission, 2011). Specifically, the authors designed and applied a Generalized Method of Moments (GMM) method to perform an empirical analysis using a panel of 1,211 innovative firms in 55 industries and 26 countries between 2004 and 2012.


Country factors have significant effects on innovation effort. Results also indicate that the moderating and complementary effects of industry and country factors depend on the geographical area.

Practical implications

Although managers have generally tended to take into account only the firm perspective in innovation activities, this paper highlights that institutional factors are also relevant and play a key role in innovation effort. The authors provide suggestions for managers on how to ensure that their investment in innovation is efficient. They also suggest that the effect of some institutional factors may be modified by competitive pressure on firms' innovation effort.


The paper makes an incremental contribution to the literature on the determinants of innovation by providing a different approach to firm innovation determinants and taking into account the complementarities between institutional and industrial factors.



Funding: This work was supported by the Spanish Ministry of Science and Innovation, under grant PID2019-105140RB-100.


Nieto, M., Alonso-Martínez, D. and González-Álvarez, N. (2022), "Industry and country effects on innovation effort", European Journal of Innovation Management, Vol. 25 No. 1, pp. 271-298.



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