How much do innovation strategies differ across firms, industries and countries? ∗
Abstract Our aim is to quantify innovation strategies of firms based on evidence from the CIS data. Using exploratory factor analysis on micro data from CIS3 in 13 countries, we identify four factors that that can be interpreted as re-search-based, user-driven, extensive and social responsibility innovation strate-gies. Since it has been put forward that diversity in the way how firms innovate can be explained by differences across sectors and/or countries, we explore to what extent the innovation strategy of a firm is influenced by this context. We use cross-classified mixed-effects model to partition the variation of innovation strategies into components identified by sectors, countries, and idiosyncrasies at the firm level. The analysis shows that sectors and countries matter to a certain extent, but most of the variance (from 80 to 95%) is given by heterogeneity among firms. Keywords: Heterogeneity, innovation strategy, innovation system, factor analysis, mixed-effects model. ∗