Abstract
The purpose of this paper is twofold. First, it investigates the way by which Tunisian service firms make their decision to innovate: simultaneously (one-stage model) or sequentially (two-stage model). Afterwards, once the innovation-making-decision way is selected, the paper analyzes its main determinants. Using a sample of 108 Tunisian service firms, the paper reveals that the two-stage model has a statistically significant advantage in predicting innovation. Indeed, it is shown that the sequential model illustrates well the innovation making-decision procedures. In fact, the main determinant behind the dominance of the sequential model is the importance that service firms give to the innovation objectives.