ABSTRACT
Many studies have examined the drivers of innovation among firms in developed settings. However, such studies in the Indonesia context is limited. This study aims to investigate the determinants of innovation among firms in Indonesia. The data was taken from World Bank Enterprise Survey (WBES), particularly the Indonesia dataset. The focus was on 996 manufacturing firms. Set product and process innovation became the dependent variables. Multivariable probit regression models was constructed. The results showed that the firms which had higher product innovation were the following firms: part of a larger group; had patent; man-aged by female; located in a large city; faced informal competitors; and conducted export activities. Mean-while, firms which were more likely to introduce the process innovation were the following firms: part of a larger group; had patent; conducted training, research, and development; had the access to the internet; and faced competition from informal firms. This information enriches the knowledge of innovation among firms. It is also useful for the Indonesia government to make policy.
