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The lasting effects of innovation on firm profitability: panel evidence from a transitional economy

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  • Anh Ngoc Mai
  • Huong Van Vu
  • Bien Xuan Bui
  • Tuyen Quang Tran

Abstract

This study is the first to study the lasting effects of innovation on firm profitability in Vietnam. Using a unique panel dataset for the period 2005–2015, our results show that innovators achieve higher profit in comparison with non-innovating firms. The positive effects of innovation on firm profitability are observed not only in the short term but also in the longer term. The benefits of innovation for firm profitability can be seen in higher export probability, better productivity, better access to formal credit, and the ability to secure government support, but only after innovation.

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  • Anh Ngoc Mai & Huong Van Vu & Bien Xuan Bui & Tuyen Quang Tran, 2019. "The lasting effects of innovation on firm profitability: panel evidence from a transitional economy," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 3417-3436, January.
    • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:3417-3436
    DOI: 10.1080/1331677X.2019.1660199
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    Cited by:

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    2. Ran Ma & Xiaodan Kong & Mianqing Wang & Xiangde Kong, 2023. "The Impact of Utility Model Patent Quality on Export Performance in China: A Moderated Mediation Effect Model," Sustainability, MDPI, vol. 15(10), pages 1-18, May.
    3. Do Vu Phuong Anh & Mai Thanh Lan & Bui Quang Tuyen & Ta Huy Hung, 2024. "Does leadership personality affect business risks? New evidence from Vietnamese small and medium-sized enterprises," Risk Management, Palgrave Macmillan, vol. 26(2), pages 1-27, May.
    4. Zhao, Yueyang & Mao, Jinzhou, 2023. "Mixed blessing: Mixed ownership reform and innovation behaviour of Chinese state-owned enterprises," Finance Research Letters, Elsevier, vol. 56(C).
    5. Cuong, Ly Kim & Hau, Hoang Tran, 2021. "Does innovation promote access to informal loans? Evidence from a transitional economy," Finance Research Letters, Elsevier, vol. 40(C).
    6. Daniel Amente KENEA, 2020. "The Role Of Innovation Strategy In Improving Organizational Performance And Productivity: Focus On Heineken Beverage Industry, Ethiopia," Annals of the University of Craiova for Journalism, Communication and Management, Department of Communication, Journalism and Education Sciences, University of Craiova, vol. 6(1), pages 31-56, December.
    7. Khleef A. Alkhawaldeh, 2021. "The Impact of Innovation on Profitability of Jordanian Services Companies," International Journal of Business and Management, Canadian Center of Science and Education, vol. 16(1), pages 1-92, August.

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    • D2 - Microeconomics - - Production and Organizations
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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