Rune Fitjar, Andrés Rodríguez-Pose, 24 June 2015

Policymakers have used a variety of measures to promote firm innovation but their exact impact remains unclear. This column argues that regional context, proxied by investment in R&D and education levels, is fundamental in shaping the innovative performance of firms. The local socioeconomic environment either favours or limits the innovative capacity of firms, depending on their level of interaction both with neighbouring and distant economic actors.

Çağatay Bircan, Ralph De Haas, 15 May 2015

Innovation enhances economic growth but the mechanisms that underpin the spread of products remain largely unclear. Based on new micro-data from Russia, this column argues that access to credit helps firms to adopt products and production processes that are new to them. However, there is little evidence that bank credit stimulates in-house R&D. Thus, banks can facilitate the diffusion of technologies within developing countries but their role in pushing the technological frontier is limited.

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