Which Portuguese firms are more innovative? The importance of multinationals and exporters

Since different countries perform differently with respect to innovation ability, and given that countries’ performances mainly reflect firms’ innovation abilities, several related questions arise: (1) which countries are most innovative? (2) which firms are most innovative? (3) is there any connection between firms´ innovativeness and their level of global engagement? The firm’s innovation level is related to: (1) firms’ specific aspects (for example, size, managerial initiative or managerial risk assumption); (2) time-specific factors; (3) technological characteristics of the sectors that firms belong to; (4) market concentration level; and (5) market orientation (for example, domestic or international). Some models (for example, Jones, 2002) assume that the stock of knowledge is a public good, equally and freely available to all firms worldwide; in contrast, Grossman and Helpman (1991) and Parente and Prescott (1994) present models in which firms have to face costs and difficulties in adopting new technological knowledge. Such barriers differ across time and countries, suggesting that external trade may influence firms´ ability to adopt and adapt existing technological knowledge. Nowadays it is common to accept that the existing stock of knowledge is quite differently appropriated and benefited from by various firms.