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Drivers of Innovation in the Malaysian Services Sector: An Analysis Based on Firm-Level Data

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  • Suresh Narayanan

    (School of Social Sciences, Universiti Sains Malaysia)

  • Mehrshad Parvin Hosseini

    (School of Social Sciences, Universiti Sains Malaysia)

Abstract

Innovation in the services sector has not received much attention in Malaysia though, as the dominant sector, its potential role in the innovation-driven economy as envisioned by the New Economic Model is immense. This paper draws from data sourced from a national-level innovation survey of service establishments to investigate firm-level drivers of innovation. Though both the definition of innovation and the variables likely to drive it were proscribed by the survey data, the findings are of interest, even if not comprehensive.Nearly half of the 303 firms (drawn from five major service subsectors) in the sample were innovating with the majority reporting improvements in quality or cost in both service products and processes. Developments of major new service lines and the filing of patents and copyrights were less common. Innovators were more likely to be firms that collaborated in R&D with other firms or agencies, firm that accessed technology from parent companies and those that were in a supplier -relationship with MNCs. Communications firms were the least innovative while there were no significant differences in innovative behaviour among firms in the other four subsectors. Important policy implications are discussed based on these findings.

Suggested Citation

  • Suresh Narayanan & Mehrshad Parvin Hosseini, 2014. "Drivers of Innovation in the Malaysian Services Sector: An Analysis Based on Firm-Level Data," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 6(1), pages 95-118, April.
    • Handle: RePEc:umk:journl:v:6:y:2014:i:1:p:95-118
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    References listed on IDEAS

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    Cited by:

    1. Nor Asiah Omar & Muhamad Azrin Nazri & Syed Shah Alam & Azhar Ahmad, 2016. "Assessing the Factors Influencing Service Innovation Capabilities and Performance," Information Management and Business Review, AMH International, vol. 8(4), pages 52-63.

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    More about this item

    Keywords

    Incremental innovation; radical innovation; supplier relationship; R&D; MNC;
    All these keywords.

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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