Masatsugu Tsuji - Faculty of Economics, Kobe International University, Japan
Hidenori Shigeno - Faculty of Economics, Kobe International University, Japan
Uasushi Ueki - ERIA, Indonesia
Hiroki Idota - Faculty of Economics, Kindai University

The aim of the paper is to identify factors promoting innovation in the framework of R&Dbased on surveys on firms in five ASEAN countries including Indonesia, Laos, Thailand, thePhilippines, and Vietnam. The method of analysis is to divide sample firms into two categories,namely the formal R&D group and informal R&D group, and whether there is anydifference between two groups is examined by comparing which of the internal capabilities,technology, human factors, or organization factors, promote innovation. The results of theestimation using ordered probit analysis indicate that the two groups pursue innovationdifferently. The formal R&D group promotes product innovation by (i) a cross-functional team,(ii) QC, whereas the informal R&D group enhances by (i) learning processes such as HRD andworker training and (ii) IT use. Estimation examines also process innovation.

Internal capability; learning process; QC; cross-functional team; HRD program; ordered probit