IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v46y2017i1p280-291.html
   My bibliography  Save this article

Institutions, resources and innovation in East Africa: A firm level approach

Author

Listed:
  • Barasa, Laura
  • Knoben, Joris
  • Vermeulen, Patrick
  • Kimuyu, Peter
  • Kinyanjui, Bethuel

Abstract

This study examines how firm-level resources interact with regional institutional quality to explain innovation in East Africa. We hypothesize that the institutional environment within which the firm operates moderates the effect of firm-level resources on innovative output. We examine the moderating role of institutions with regards to the transformation of firm-level resources including internal research and development, human capital and managerial experience into innovative output using firm-level data from the World Bank Enterprise Survey and the Innovation Follow-up Survey for three countries in East Africa including Kenya, Tanzania and Uganda. We test our hypotheses using a clustered robust standard errors logistic model. We find that the effects of firm-level resources vary depending on the institutional environment and that regional institutional quality positively moderates the effects of the firm-level resources.

Suggested Citation

  • Barasa, Laura & Knoben, Joris & Vermeulen, Patrick & Kimuyu, Peter & Kinyanjui, Bethuel, 2017. "Institutions, resources and innovation in East Africa: A firm level approach," Research Policy, Elsevier, vol. 46(1), pages 280-291.
  • Handle: RePEc:eee:respol:v:46:y:2017:i:1:p:280-291
    DOI: 10.1016/j.respol.2016.11.008
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733316301986
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    2. Micheline Goedhuys & Leo Sleuwaegen, 2010. "High-growth entrepreneurial firms in Africa: a quantile regression approach," Small Business Economics, Springer, vol. 34(1), pages 31-51, January.
    3. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    4. Martin Srholec, 2011. "A multilevel analysis of innovation in developing countries ," Industrial and Corporate Change, Oxford University Press, vol. 20(6), pages 1539-1569, December.
    5. McGee, Jeffrey E. & Dowling, Michael J., 1994. "Using R&D cooperative arrangements to leverage managerial experience: A study of technology-intensive new ventures," Journal of Business Venturing, Elsevier, vol. 9(1), pages 33-48, January.
    6. Stephen Roper & James Love, 2006. "Innovation and regional absorptive capacity: the labour market dimension," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 40(2), pages 437-447, June.
    7. P Cooke & M G Uranga & G Etxebarria, 1998. "Regional Systems of Innovation: An Evolutionary Perspective," Environment and Planning A, , vol. 30(9), pages 1563-1584, September.
    8. Andreas Al-Laham & Daniel Tzabbar & Terry L. Amburgey, 2011. "The dynamics of knowledge stocks and knowledge flows: innovation consequences of recruitment and collaboration in biotech," Industrial and Corporate Change, Oxford University Press, vol. 20(2), pages 555-583, April.
    9. Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003. "Institutional causes, macroeconomic symptoms: volatility, crises and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 49-123, January.
    10. Edinaldo Tebaldi & Bruce Elmslie, 2013. "Does institutional quality impact innovation? Evidence from cross-country patent grant data," Applied Economics, Taylor & Francis Journals, vol. 45(7), pages 887-900, March.
    11. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth : revisiting the evidence," Policy Research Working Paper Series 3004, The World Bank.
    12. Stephen Oluwatobi & Uchenna Efobi & Isaiah Olurinola & Philip Alege, 2015. "Innovation in Africa: Why Institutions Matter," South African Journal of Economics, Economic Society of South Africa, vol. 83(3), pages 390-410, September.
    13. Richard Blundell & Lorraine Dearden & Costas Meghir & Barbara Sianesi, 1999. "Human capital investment: the returns from education and training to the individual, the firm and the economy," Fiscal Studies, Institute for Fiscal Studies, vol. 20(1), pages 1-23, March.
    14. Minyuan Zhao, 2006. "Conducting R& D in Countries with Weak Intellectual Property Rights Protection," Management Science, INFORMS, vol. 52(8), pages 1185-1199, August.
    15. Kunčič, Aljaž, 2014. "Institutional quality dataset," Journal of Institutional Economics, Cambridge University Press, vol. 10(01), pages 135-161, March.
    16. José Antonio Alonso & Carlos Garcimartín, 2013. "The Determinants Of Institutional Quality. More On The Debate," Journal of International Development, John Wiley & Sons, Ltd., vol. 25(2), pages 206-226, March.
    17. Hermann Achidi Ndofor & David G. Sirmon & Xiaoming He, 2015. "Utilizing the firm's resources: How TMT heterogeneity and resulting faultlines affect TMT tasks," Strategic Management Journal, Wiley Blackwell, vol. 36(11), pages 1656-1674, November.
    18. Anokhin, Sergey & Schulze, William S., 2009. "Entrepreneurship, innovation, and corruption," Journal of Business Venturing, Elsevier, vol. 24(5), pages 465-476, September.
    19. Martín-de Castro, Gregorio & Delgado-Verde, Miriam & Navas-López, José E. & Cruz-González, Jorge, 2013. "The moderating role of innovation culture in the relationship between knowledge assets and product innovation," Technological Forecasting and Social Change, Elsevier, vol. 80(2), pages 351-363.
    20. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    21. Bjørn Asheim & Lars Coenen, 2006. "Contextualising Regional Innovation Systems in a Globalising Learning Economy: On Knowledge Bases and Institutional Frameworks," The Journal of Technology Transfer, Springer, vol. 31(1), pages 163-173, January.
    22. Elizabeth Asiedu & James Freeman, 2009. "The Effect of Corruption on Investment Growth: Evidence from Firms in Latin America, Sub-Saharan Africa, and Transition Countries ," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 200-214, May.
    23. Olson, Mancur, Jr & Sarna, Naveen & Swamy, Anand V, 2000. "Governance and Growth: A Simple Hypothesis Explaining Cross-Country Differences in Productivity Growth," Public Choice, Springer, vol. 102(3-4), pages 341-364, March.
    24. McCann, Brian T. & Folta, Timothy B., 2011. "Performance differentials within geographic clusters," Journal of Business Venturing, Elsevier, vol. 26(1), pages 104-123, January.
    25. Edward L. Glaeser & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "Do Institutions Cause Growth?," Journal of Economic Growth, Springer, vol. 9(3), pages 271-303, September.
    26. Nichter, Simeon & Goldmark, Lara, 2009. "Small Firm Growth in Developing Countries," World Development, Elsevier, vol. 37(9), pages 1453-1464, September.
    27. Jiménez-Jiménez, Daniel & Sanz-Valle, Raquel, 2011. "Innovation, organizational learning, and performance," Journal of Business Research, Elsevier, vol. 64(4), pages 408-417, April.
    28. Estrin, Saul & Korosteleva, Julia & Mickiewicz, Tomasz, 2013. "Which institutions encourage entrepreneurial growth aspirations?," Journal of Business Venturing, Elsevier, vol. 28(4), pages 564-580.
    29. Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-285, January.
    30. Keunjae Lee & Sang-Mok Kang, 2007. "Innovation Types and Productivity Growth: Evidence from Korean Manufacturing Firms," Global Economic Review, Taylor & Francis Journals, vol. 36(4), pages 343-359.
    31. Keld Laursen & Francesca Masciarelli & Andrea Prencipe, 2012. "Regions Matter: How Localized Social Capital Affects Innovation and External Knowledge Acquisition," Organization Science, INFORMS, vol. 23(1), pages 177-193, February.
    32. Chiara Franco & Alberto Marzucchi & Sandro Montresor, 2012. "Absorptive capacity, innovation cooperation and human-capital. Evidence from 3 European countries," JRC Working Papers on Corporate R&D and Innovation 2012-05, Joint Research Centre (Seville site).
    33. Ron Boschma & Koen Frenken, 2009. "Some Notes on Institutions in Evolutionary Economic Geography," Economic Geography, Clark University, vol. 85(2), pages 151-158, April.
    34. Varsakelis, Nikos C., 2006. "Education, political institutions and innovative activity: A cross-country empirical investigation," Research Policy, Elsevier, vol. 35(7), pages 1083-1090, September.
    35. Mahoney, Joseph T., 1995. "The management of resources and the resource of management," Journal of Business Research, Elsevier, vol. 33(2), pages 91-101, June.
    36. Steven W. Bradley & Jeffery S. McMullen & Kendall Artz & Edward M. Simiyu, 2012. "Capital Is Not Enough: Innovation in Developing Economies," Journal of Management Studies, Wiley Blackwell, vol. 49(4), pages 684-717, June.
    37. Micheline Goedhuys, 2007. "Learning, product innovation, and firm heterogeneity in developing countries; Evidence from Tanzania," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 269-292, April.
    38. Liu, Xiaohui & Buck, Trevor, 2007. "Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 36(3), pages 355-366, April.
    39. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
    40. Edwin Mansfield, 1984. "R&D and Innovation: Some Empirical Findings," NBER Chapters,in: R&D, Patents, and Productivity, pages 127-154 National Bureau of Economic Research, Inc.
    41. Paul Robson & Helen Haugh & Bernard Obeng, 2009. "Entrepreneurship and innovation in Ghana: enterprising Africa," Small Business Economics, Springer, vol. 32(3), pages 331-350, March.
    42. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    43. Micheline Goedhuys & Norbert Janz & Pierre Mohnen, 2014. "Knowledge-based productivity in "low-tech" industries: evidence from firms in developing countries," Industrial and Corporate Change, Oxford University Press, vol. 23(1), pages 1-23, February.
    44. Weilei (Stone) Shi & Sunny Li Sun & Mike W. Peng, 2012. "Sub-National Institutional Contingencies, Network Positions, and IJV Partner Selection," Journal of Management Studies, Wiley Blackwell, vol. 49(7), pages 1221-1245, November.
    45. P Cooke & M G Uranga & G Etxebarria, 1998. "Regional systems of innovation: an evolutionary perspective," Environment and Planning A, Pion Ltd, London, vol. 30(9), pages 1563-1584, September.
    46. Zhu, Hong & Xia, Jun & Makino, Shige, 2015. "How do high-technology firms create value in international M&A? Integration, autonomy and cross-border contingencies," Journal of World Business, Elsevier, vol. 50(4), pages 718-728.
    47. Ayyagari, Meghana & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2012. "Firm Innovation in Emerging Markets: The Role of Finance, Governance, and Competition," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(06), pages 1545-1580, February.
    48. Bagala P. BISWAL, 1999. "Private Tutoring And Public Corruption: A Cost-Effective Education System For Developing Countries," The Developing Economies, Institute of Developing Economies, vol. 37(2), pages 222-240, June.
    49. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
    50. Ron Boschma, 2005. "Proximity and Innovation: A Critical Assessment," Regional Studies, Taylor & Francis Journals, vol. 39(1), pages 61-74.
    51. J. Scott Long & Jeremy Freese, 2006. "Regression Models for Categorical Dependent Variables using Stata, 2nd Edition," Stata Press books, StataCorp LP, edition 2, number long2, April.
    52. Cassandra C. Wang & George C. S. Lin, 2013. "Dynamics of innovation in a globalizing china: regional environment, inter-firm relations and firm attributes," Journal of Economic Geography, Oxford University Press, vol. 13(3), pages 397-418, May.
    53. Meyer, Klaus E. & Estrin, Saul & Bhaumik, Sumon Kumar & Peng, Mike W., 2009. "Institutions, resources and entry strategies in emerging economies," LSE Research Online Documents on Economics 4217, London School of Economics and Political Science, LSE Library.
    54. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3, Specia), pages 783-832.
    55. Anker Lund Vinding, 2006. "Absorptive capacity and innovative performance: A human capital approach," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 507-517.
    56. Chudnovsky, Daniel & Lopez, Andres & Pupato, German, 2006. "Innovation and productivity in developing countries: A study of Argentine manufacturing firms' behavior (1992-2001)," Research Policy, Elsevier, vol. 35(2), pages 266-288, March.
    57. Goedhuys, Micheline & Veugelers, Reinhilde, 2012. "Innovation strategies, process and product innovations and growth: Firm-level evidence from Brazil," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 516-529.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:tefoso:v:132:y:2018:i:c:p:92-104 is not listed on IDEAS
    2. repec:wsi:jikmxx:v:16:y:2017:i:04:n:s0219649217500423 is not listed on IDEAS

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:respol:v:46:y:2017:i:1:p:280-291. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/respol .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.