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Growth dilemmata: The case of African firms

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  • Tinta, Abdoulganiour Almame

Abstract

In this study, we exploit panel data of 2450 manufacturing firms from a sample of 30 African countries from 2013 to 2023 to examine the link between firm performance and innovation. Focusing on innovation and firm growth, this study addresses R&D activities, product innovation, process innovation, and organizational practices. Applying various methods, the findings show that firms that succeed in process innovation or R&D activities achieve much higher performance. This performance is stronger for high-growth firms. Moreover, firms implementing new management practices tend to increase sales but not employment, with higher returns at the 50th percentile. Organizational innovation is better for firms that are about to face high demand. The introduction of new products is not necessarily accompanied by increased sales except for the lower quantiles. New products are especially risky and do not result in employment growth. The existence of competitive pressure and the payment of bribes by firms to public officials speed up sales.

Suggested Citation

  • Tinta, Abdoulganiour Almame, 2025. "Growth dilemmata: The case of African firms," Economic Systems, Elsevier, vol. 49(4).
    • Handle: RePEc:eee:ecosys:v:49:y:2025:i:4:s093936252500041x
    DOI: 10.1016/j.ecosys.2025.101329
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    Keywords

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    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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