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The paper focuses on the effects of technology-push and demand-pull determinants on firm's innovation propensity comparing start-ups and established firms in the specialized suppliers' industry. Specifically, it explores technology-push and demand-pull effects in isolation and in their interaction using a sample of European firms in the period 2007-2009. Our main results show that either the technology-push and demand-pull determinants exert a positive impact on innovation propensity in both start-ups and established firms, Moreover, in start-ups, we discovered that the demand-pull determinant plays a strong moderating role in the relationship between innovation propensity and the technology-push determinant. The paper contributes in making managers more aware of the effect that some choices concerning the composition of the firm’s workforce may produce on the firm’s innovation propensity. There are also implications for policy makers whose overemphasis on demand pull incentives may disempower the positive effect of the technology determinant on the innovation propensity of start-ups.

Innovation Propensity in the Specialized Suppliers Industry