Determinants of innovation outputs in developing countries

Purpose – The purpose of this paper is to examine the determinants of innovation outputs proxied by number of patent applications, trademarks and industrial designs in developing countries. Design/methodology/approach – The paper employs a panel data and Negative Binomial method to analyse the main determinants affecting the innovation outputs. Findings – The results implicitly suggest that providing a fertile ground to attract more foreign direct investment (FDI) can lead to much better innovation outputs. The study also strongly supports the role of institutions and governance for increasing innovation activities in developing economies as indicated by positive impacts of governance factors in the model. However, the impact of economic freedom indicators on improving innovation outputs is mixed. Originality/value – This paper contributes to the existing literature in two ways: it examines the effect of FDI and research and development on innovation of selected developing countries; and the study uses a panel data approach to increase the accuracy of the results through exploiting the significant variations of innovation outputs across countries, while controlling for a larger number of innovation outputs and product determinants. To the authors knowledge, this is the first empirical study on the behaviour of innovation outputs for developing countries.