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Innovation Barriers and Their Impact on Innovation: Evidence from Indonesian Manufacturing Firms

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  • Arif Hartono
  • Ratih Kusumawardhani

Abstract

Using innovation data derived from the Indonesia Innovation Survey (IIS) 2011, this study investigates the nature and importance of innovation barriers faced by Indonesian manufacturing firms and examines the impact of innovation barriers on product, process, organization and marketing innovation and on innovation performance. Undertaking factor analysis, the study finds that the innovation barriers can be categorized as market and institution barriers, employee and organization attitude barriers, finance and risk barriers, and knowledge and cooperation barriers. Applying logit and tobit regression models, this study shows that barriers related to employee and organization attitude have positive influence on innovation and innovation performance. In contrast, the last two barriers have negative effects on innovation and innovation performance. Financial and risk constraints are perceived by the firms to be the most important barriers. Innovative and non-innovative firms perceive innovation barriers related to lack of information on technology, staff resistance to change, managers resistance to change and organization rigidity, differently.

Suggested Citation

  • Arif Hartono & Ratih Kusumawardhani, 2019. "Innovation Barriers and Their Impact on Innovation: Evidence from Indonesian Manufacturing Firms," Global Business Review, International Management Institute, vol. 20(5), pages 1196-1213, October.
  • Handle: RePEc:sae:globus:v:20:y:2019:i:5:p:1196-1213
    DOI: 10.1177/0972150918801647
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    References listed on IDEAS

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    Cited by:

    1. Kyunga Na & Young-Hee Kang, 2019. "Relations between Innovation and Firm Performance of Manufacturing Firms in Southeast Asian Emerging Markets: Empirical Evidence from Indonesia, Malaysia, and Vietnam," Journal of Open Innovation: Technology, Market, and Complexity, MDPI, Open Access Journal, vol. 5(4), pages 1-16, December.

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