Template-type: ReDif-Paper 1.0 Author-Name: Paunov C. Author-Name: Rollo V. Author-workplace-name: UNU-MERIT Title: Has the internet fostered inclusive innovation in the developing world? Abstract: Based on 50,013 firm observations covering 117 developing and emerging countries, this paper shows knowledge spillover effects from industries use of the internet boosted the average firms productivity and innovation performance. We document that industries digitization had heterogeneous impacts results from quantile regressions indicate that the most productive firms benefited much more than others. Wider Internet adoption rates were also of larger benefit to single-plant establishments, non-exporters and firms in remote locations, particularly to the most productive among these firms. Overall, we document that the internet can play an important role to support inclusive innovation, conditional on firms absorptive capacities. Keywords: Firm Behavior, Empirical Analysis, Microeconomic Analyses of Economic Development, Industrialization, Manufacturing and Service Industries, Choice of Technology, Technological Change, Diffusion Processes Classification-JEL: O33, O14, O12, D22 Series: UNU-MERIT Working Papers Creation-Date: 2014 Number: 2014-084 File-URL: https://unu-merit.nl/publications/wppdf/2014/wp2014-084.pdf File-Format: application/pdf File-Size: 936034 Handle: RePEc:unm:unumer:2014084