Innovation is a big factor in making companies more productive. Economists have looked into what makes companies innovate and how it affects their success. It's important to study this at the company level because each company is different. Some companies are better at innovating than others, and this affects how well they do in the market. By studying individual companies, we can see how their knowledge and innovation efforts impact their productivity. This helps us understand how innovation helps companies grow and do well in the economy.