This paper examines the ability of latent firm and manager characteristics to explain variation in innovation productivity. Evidence suggests that latent, but not observable, firm and manager characteristics explain a large portion of the variation in a firm's innovation productivity. Our tests mostly show that latent firm characteristics explain slightly more of the variation relative to latent manager characteristics. For robustness, our analysis shows no significant difference in the average change in innovation productivity and in abnormal returns following two different samples of manager-firm separations: one where managers' expected innovation abilities are high and the other a random sample. Overall, the results suggest that compared to firm characteristics, managers matter moderately less for corporate innovation.