The paper examines the relations between the innovation activity and the firm
size. This research administers a questionnaire- based survey developed from
the UK Innovation Survey (CIS). The survey covers quantitative and qualitative
information addressing the innovation activities in the small and medium sized
firms in Egypt during the period 2010-2012. The sample covers manufacturing
firms in different regions in Egypt such as north, middle and Upper Egypt as
well. The paper uses a logit model to study the relationship between the
innovation activity and firm size and an ordered logit model to study the
relationship between the sources of innovation and performance. This paper
demonstrates there is a positive relationship between size firm and innovation.
The main policy implications of these results are that innovation policies should
explicitly identify their major objective and target group of firms.
