IDEAS home Printed from https://ideas.repec.org/a/vrs/ecobur/v12y2026i2p71-96n1002.html

Unlocking innovation: Governance and firm-level innovation in selected Asian countries

Author

Listed:
  • Brata Aloysius Gunadi

    (Faculty of Business and Economics, Atma Jaya Yogyakarta University, Jalan Babarsari No. 43, Yogyakarta, 55281Indonesia)

  • Silalahi Pristanto

    (Faculty of Business and Economics, Atma Jaya Yogyakarta University, Jalan Babarsari No. 43, Yogyakarta, 55281Indonesia)

  • Prabowo Ronny

    (Faculty of Economics and Business, Satya Wacana Christian University, Jalan Diponegoro No. 52-60, Salatiga, 50711Indonesia)

  • Hartono Billie Ariyanta

    (Faculty of Business and Economics, Atma Jaya Yogyakarta University, Jalan Babarsari No. 43, Yogyakarta, Indonesia, 55281)

Abstract

This study examines the association between governance and firm-level innovation in Indonesia and Philippines, offering insights for escaping the Middle-Income Trap (MIT). Using the 2023 World Bank Enterprise Surveys (WBES), we estimate cross-sectional logit models with stratified analyses by sector and firm size. Our findings reveal that while burdensome tax administration and informal payments are negatively associated with innovation in Indonesia, these payments paradoxically show a positive association in the Philippines, reflecting firms’ strategic adaptation to weak formal institutions. Across both countries, worker training emerges as the most consistent innovation driver, regardless of sector or firm size. By providing the first 2023 WBES-based comparison of how formal and informal governance obstacles shape firm-level innovation in two ASEAN economies, this study identifies critical pathways for governance reform and innovation-led growth.

Suggested Citation

  • Brata Aloysius Gunadi & Silalahi Pristanto & Prabowo Ronny & Hartono Billie Ariyanta, 2026. "Unlocking innovation: Governance and firm-level innovation in selected Asian countries," Economics and Business Review, Sciendo, vol. 12(2), pages 71-96.
    • Handle: RePEc:vrs:ecobur:v:12:y:2026:i:2:p:71-96:n:1002
    DOI: 10.18559/ebr.2026.2.2622
    as

    Download full text from publisher

    File URL: https://doi.org/10.18559/ebr.2026.2.2622
    Download Restriction: no
    File URL: https://libkey.io/10.18559/ebr.2026.2.2622?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies

    Statistics

    Access and download statistics

    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:vrs:ecobur:v:12:y:2026:i:2:p:71-96:n:1002. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.