Innovation decision of Tunisian service firms: an empirical analysis

Innovation is widely recognized as a key driver of economic growth and competitiveness. Previous works dealing with it has specially focused on its effect on the economic performance of innovators. In this context, the literature distinguishes between four kinds of innovation: product, process, radical and incremental. Indeed, despite their importance, the innovation determinants and the innovation making-decision are less studied. Based on a sample of 108 Tunisian service firms, the purpose of this paper is to find out the way by which firms make their decision to innovate: simultaneously (one-stage model) or sequentially (twostage model). We obtain that the two-stage model has a statistically significant advantage in predicting innovation. In practice, we argue that the sequential model illustrates well the innovation making-decision procedures.