**Table 9: Comparison of Firm-level Innovation Measures and Business Environment Indicators 2009 SLLSE and 2011 WBES**

|**Group**|**Variable**|**2008**|**2010**|
|---|---|---|---|
||%|of 'yes' resp|onses(means)|
|Innovation|Introduced new goods or services|9.1%|31.0%|
||Significantly improved an existing product|16.0%||
||Introduced new or improved business processes|9.3%|43.5%|
||Changed the way work is organized in firm|14.1%|36.1%|
||Introduced a new method ofpricing goods or services|20.5%|40.6%|
|Incentives forproductive entrepreneurship|Visits from officials from the Inland revenue department|20.5%||
|Access to skills|Education level (years) of manager/respondent|12.3||
||Average education level of employees (years)||2.7|
||Whether the manager has ever received any business training|16.1%||
||Whether firm trains workers||28.0%|
||Training: Secondary or technical school|2.6%||
||Training: College or university|1.3%||
||Training: Short course offered government / NGO|3.3%||
||Training: Short course offered by consulting firm|3.1%||
||Training: Paid for individual consultancy|4.3%||
|Access to finance|What percentage of the start-up capital of the business came from each of the|9.5%||
||Share of investment financed externally||12.6%|
||Whatpercentage ofyour sales are made on credit?|17.9%|30.9%|
|Connectivity to global knowledge|Does your firm use the internet?|20.5%|45.4%|
||Has the firm used a consulting service in the last 3 years?|8.9%||
||Whatpercentage ofyour sales are made to the following:{Foreign firms}|1.4%||
|Sample size||610|609|

Source: 2009 SLLSE (Booster Sample) and 2011 WBES. Some questions differ slightly across survey-years.

**Table 10: Firm-level Innovation and the Business Environment in Sri Lanka**

||**(1)**|**(2)**<br>**In the last three years**<br>**itdd**|**(3)**<br>**, has this establishment**<br>**itdd**|**(4)**<br>**:**<br>**itdd**|
|---|---|---|---|---|
|**Dependent variable (0/1 indicator):**<br>****Probit coefficients displayed**|**introduced new**<br>**products or**<br>**services?**|**nrouce any new or**<br>**significantly improved**<br>**methods of manufacturing**<br>**products or offering**<br>**services?**|**nrouce any new or**<br>**significantly improved**<br>**organizational structures**<br>**or management**<br>**practices?**|**nrouce new or**<br>**significantly**<br>**improved**<br>**marketing**<br>**methods?**|
|Average education level of employees (years)|0.091|0.276+++|0.075|0.095|
||(0.060)|(0.074)|(0.063)|(0.063)|
|Whether firm trains workers|0.468+++|0.449+++|0.658+++|0.675+++|
||(0.142)|(0.141)|(0.145)|(0.146)|
|Whether firm uses internet (website or email)|0.805+++|0.770+++|0.959+++|0.778+++|
||(0.137)|(0.130)|(0.136)|(0.133)|
|Percent of sales made on credit|0.001|-0.000|0.001|0.002|
||(0.002)|(0.002)|(0.002)|(0.002)|
|Share of investment financed externally|0.092|-0.069|0.458|0.445|
||(0.276)|(0.288)|(0.294)|(0.299)|
|Constant|-1.595+++|-2.639+++|-1.636++|-1.867+++|
||(0.609)|(0.743)|(0.653)|(0.635)|
|Observations|600|596|581|593|
|Pseudo R-squared|0.210|0.216|0.250|0.248|
|Sector fixed effects|Y|Y|Y|Y|
|Province fixed effects|Y|Y|Y|Y|

Notes: Standard errors in parentheses. + p<.1 ++ p<.05 +++ p<.01. Source: WBES 2011 41