Determinants of technological and non-technological innovation: empirical insights from Indian manufacturing industries

Abstract

PurposeThis paper empirically explored the influence of external and internal factors on technological and non-technological innovation of 5747 Indian firms. The study also explored novel insights about manufacturing firms by segregating them into high-technology and low-technology industries.Design/methodology/approachThe study employed hierarchical regression analysis to analyse a cross-sectional dataset gathered from the World Bank enterprise survey. The firms are segregated into high-technology and low-technology industries based on the technology-intensity classification of the manufacturing industry given by the Organisation for Economic Co-operation and Development.FindingsThe main results highlight that technological and non-technological innovation was primarily driven by internal resources and capabilities rather than external factors. The authors found the highest effect of research and development spending on both forms of innovation. In both high-tech and low-tech industries, technology transfer is positively associated with technological innovation and negatively associated with non-technological innovation. Furthermore, external business support has substantially influenced non-technological innovation in low-tech industries.Originality/valueThis study used two-step hierarchical regression to explore the influence of external and internal factors on technological and non-technological innovation separately. Exploring determinants of innovation in high-technology and low-technology industries also brings the distinct prerequisites of enhancing innovation to the attention of policymakers and industry experts.