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Innovation and employment growth: evidence from manufacturing firms in Africa

Author

Listed:
  • Ibrahim Mike Okumu

    (Makerere University)

  • Edward Bbaale

    (Makerere University)

  • Madina Mwagale Guloba

    (Makerere University)

Abstract

This paper estimates the association between innovation and employment growth among manufacturing firms in Africa. The paper uses a cross-sectional World Bank Enterprise Survey dataset in which innovation is categorised as product innovation and process innovation. Results from the pooled ordinary least squares (OLS) estimation are more efficient compared to IV 2SLS. The pooled OLS results indicate that: (1) employment growth is positively associated with both process and product innovation, (2) a weak business environment especially intermittent electricity supply undermines the ability of innovation to induce employment growth and (3) relationship between innovation and employment growth is not conditioned on firm age although it is conditioned on firm size. Such findings suggest that employment growth in Africa could benefit from policies and programs that induce firms to embrace innovation. In addition, a strong business environment is necessary in complementing the potential of innovation to enhance employment growth in Africa.

Suggested Citation

  • Ibrahim Mike Okumu & Edward Bbaale & Madina Mwagale Guloba, 2019. "Innovation and employment growth: evidence from manufacturing firms in Africa," Journal of Innovation and Entrepreneurship, Springer, vol. 8(1), pages 1-27, December.
    • Handle: RePEc:spr:joiaen:v:8:y:2019:i:1:d:10.1186_s13731-019-0102-2
    DOI: 10.1186/s13731-019-0102-2
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    Cited by:

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    2. Liard-Muriente, Carlos F., 2023. "Adaptations, Female Labour Participation, and Innovation among SMEs in Zambia during Covid-19 Pandemic," African Journal of Economic Review, African Journal of Economic Review, vol. 11(4), September.
    3. Henry Egbezien Inegbedion & Perejite Roseline Thikan & Joseph Olusegun David & John Oluwasayo Ajani & Fred Ojochide Peter, 2024. "Small and medium enterprise (SME) competitiveness and employment creation: the mediating role of SME growth," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
    4. Piotr F. Borowski, 2021. "Innovation strategy on the example of companies using bamboo," Journal of Innovation and Entrepreneurship, Springer, vol. 10(1), pages 1-17, December.
    5. Rawan Elshaarawy & Riham A. Ezzat, 2023. "Global value chains, financial constraints, and innovation," Small Business Economics, Springer, vol. 61(1), pages 223-257, June.
    6. Porath, Daniel & Nabachwa, Sarah & Agasha, Ester & Kijjambu, Nsambu Frederick, 2021. "Innovation and employment in Sub-Saharan Africa," UASM Discussion Paper Series 10/2021, University of Applied Sciences Mainz.
    7. Nogbou Andetchi Aubin Amanzou & Zie Ballo & Sery Guy Flavien Troupa, 2022. "The application of knowledge stylised facts in West Africa Economic and Monetary Union (WAEMU)," Journal of Innovation and Entrepreneurship, Springer, vol. 11(1), pages 1-20, December.
    8. de Guimarães, Julio Cesar Ferro & Severo, Eliana Andréa & Jabbour, Charbel Jose Chiappetta & de Sousa Jabbour, Ana Beatriz Lopes & Rosa, Ariane Ferreira Porto, 2021. "The journey towards sustainable product development: why are some manufacturing companies better than others at product innovation?," Technovation, Elsevier, vol. 103(C).
    9. Charles Karani & Patience Mshenga, 2021. "Steering the sustainability of entrepreneurial start-ups," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 11(1), pages 223-239, December.
    10. Keraga, Mezid N. & Stephan, Andreas, 2023. "Does innovation stimulate employment in Africa? New firm-level evidence from the Worldbank Enterprise Survey," Working Paper Series in Economics and Institutions of Innovation 494, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    11. Keraga, Mezid N. & Lööf, Hans & Stephan, Andreas, 2024. "Innovation and employment in sub-Saharan Africa: New evidence from the World Bank Enterprise Survey," Working Paper Series in Economics and Institutions of Innovation 497, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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    More about this item

    Keywords

    Employment; Product innovation; Process innovation; Africa;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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