This relation holds for the majority of countries with elasticities ranging between 0.3% and 0.6%. Firms with a large productivity gap at the beginning of the period are considered far from the technology frontier, while those on a par with or with a small productivity gap compared to the top productive firms are close to the technology frontier. However, firms with a low productivity level at the beginning of the period are as likely to innovate as those with a higher productivity level. These findings hold for firms in almost all participating countries. For firms closer to the technology frontier, those that receive public funding spend 30% to 50% more on innovation than those that do not receive public funding.