Abstract
This article investigates the underlying factors that might shape the firm�s choices with respect to degrees of innovation novelty. Using a sample of 2983 firms observed under the Portuguese Community Innovation Survey, we assess the relative relevance of a set of firm- and industry-specific factors in explaining firms� choices about incremental or radical innovation. The results indicate that both the firm�s idiosyncratic historical factors giving rise to heterogeneous R&D capabilities and the industry context have power to shape the firm�s innovation choices, even though firm-specific factors appear to be more powerful. The estimated impacts on firm�s innovation novelty are, nonetheless, significantly moderated by the type of firm and industry.
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