# 2. Data

We use a fi rm-level dataset collected by the World Bank across 43 developing countries (Investment Climate Surveys).<sup>7</sup> The surveys were conducted between 2002 and 2005 and the samples were designed to be representative of the population of fi rms according to their industry and location within each country. Although only one wave of data is available for each country, the information available in the survey has several advantages for analyzing technological innovations. First, it is based on a common questionnaire across a large set of countries, which yields comparable information on several fi rm-level variables. Among others, the survey collects information on whether the fi rm recently adopted new technology, the main channels used to acquire technological innovations, its ownership structure, age, size, human capital composition, and whether it participates in international trade. The survey also collects information on the fi rm’s R&D activities and technology licensing. Table A.1 de fi nes in detail all the variables used in the analysis and Table A.2 reports the summary statistics. The fi nal sample includes 17, 723 fi rms distributed across a wide set of manufacturing industries - auto and auto components, beverages, chemicals, electronics, food, garments, leather, metals and machinery, non-metallic and plastic materials, paper, textiles, wood and furniture - in 43 countries in Africa, Asia, Eastern Europe, and Latin America.<sup>8</sup> Second, the survey allows us to use a broad de fi nition for technological innovation. Speci fi cally, we de fi ne technological innovation as a dummy variable equal to one if a fi rm reports having introduced new technology that substantially changed the way in which its main product

> 7The Investment Climate Surveys were conducted in 68 developing countries. We use data for only 43 countries, due to the lack of information on the main variables of interest for the remaining countries. We focus the analysis on manufacturing fi rms only. The information collected in the surveys is based on a 1.5-2 hours interview with the fi rm manager. Detailed information on the surveys can be obtained at: http://iresearch.worldbank.org/ics/jsp/index.jsp. In what follows, we will refer to fi rms as being the unit of analysis but the unit of data collection was actually an establishment or plant.

> 8The countries included in the dataset are Albania (2005), Armenia (2005), Belarus(2005), Bosnia and Herzegovina (2005) Brazil (2003), Bulgaria (2005), Chile (2004), China (2003), Croatia (2005), Czech Republic (2005), Ecuador (2003), Egypt (2004), El Salvador (2003), Estonia (2005), Georgia (2005), Guatemala (2003), Honduras (2003), Hungary (2005), Indonesia (2003), Kazakhstan (2005), Kyrgyzstan (2005), Latvia (2005), Lithuania (2005), Madagascar (2005), Malaysia (2003), Moldova (2005), Nicaragua (2003), Philippines (2003), Poland (2005), Romania (2005), Russia (2005), Serbia and Montenegro (2005), Slovakia (2005), Slovenia (2005), South Africa (2003), Tajikistan (2005), Thailand (2004), Turkey (2005), Ukraine (2005), Uzbekistan (2005), Vietnam (2005), and Zambia (2002). The year in parentheses indicates when the survey was conducted in each country.

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