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Historically, the research on innovation has evolved in the context of advanced economies and high-tech environments. This work represents an investigative exercise following the works of those scholars who have put their attention to this rather young research field, looking to throw some light into the innovation phenomenon in emerging economies. The dissertation has the objective to unravelling some of the nuances in the innovation management field in emerging economies. Accordingly, this work is structured in three interconnected analysis that start from a general study of innovation strategies at firm-level and narrows down to specific aspects of these strategies in a sample of Mexican firms.

The first part of this work explores the literature on the modes of innovation to determine the types of strategies utilised by firms in order to attain innovation and, subsequently analysing which is more effective. The analysis covers 9 628 Mexican firms with 10 or more employees. The results of the logit regressions suggest that a combined STI and DUI innovation approach yields better results in terms of product innovation. Also, these results point out that the weight of DUI mode of innovation is larger on product innovation than the STI mode. This is opposed to what was expected regarding the utilisation of the modes of innovation in emerging economies. Finally, the combination of STI and DUI modes are limited only to product innovation. The DUI mode has a greater impact on process innovation than STI mode as well as the combination of STI and DUI.

The second part of this dissertation empirically analyses the importance of external interactions over innovation results, first, in terms of the R&D content of the interactions (R&D-related and non-R&D-related), and second, in terms of the geographical scope (regional and global). The results aim to provide a more nuanced picture of the type of interactions pursued by the domestic SMEs in an emerging economy context. The analysis uses a sample of 2 834 domestic SMEs in Mexico with 10 or more employees during the period of 2010 to 2013. The results point out that domestic SMEs in Mexico seem to effectively innovate through non-R&D interactions, but not so using interactions based on R&D. On the other hand, the findings suggest that domestic SMEs find relevant knowledge that satisfy their requirements within regional boundaries, at least if this is compared with those accessing only global knowledge. However, firms that establish both global and regional interactions simultaneously have a greater innovation capacity than those who only rely on regional interactions.

Lastly, inspired by the previous two parts of this dissertation, the third part examines, in the context of an emerging economy, the role of Technology-based Knowledge Intensive Business Services as potential suppliers of crucial knowledge for innovation in manufacturing firms in low technology sectors and the impact on their innovation outputs. The analysis is based on sample of 2 735 manufacturing firms with 10 or more employees from the period of 2010 to 2013. The results show that product innovation in low-tech and medium-low-tech manufacturing firms is influenced positively by T-KIBS to different extents. However, this effect seems to decline after two years, suggesting that, although the potential for innovation in low-tech and medium-low-tech manufacturing firms can be enhanced by acquiring T-KIBS, this seems to be a rather short-term strategy.