IDEAS home Printed from https://ideas.repec.org/p/agd/wpaper/22-074.html
   My bibliography  Save this paper

The interaction effect of government non-financial support and firm’s regulatory compliance on firm innovativeness in Sub Saharan Africa

Author

Listed:
  • Sam Njinyah

    (Manchester Metropolitan University, UK)

  • Simplice A. Asongu

    (Yaoundé, Cameroon)

  • Ngozi B. Adeleye

    (Covenant University, Ogun State, Ota, Nigeria)

Abstract

Firms' regulatory compliance with environmental and safety issues has been suggested as one of the reasons why firms innovate. Such compliance provides legitimacy, improves reputation and corporate image, and enhances customer loyalty and competitive advantages, which influences firm innovativeness. However, regulatory compliance is costly and with limited resources, the role of government support is crucialas a moderator, to help firms become more compliant and influence their innovativeness. The study uses data from the World Bank Enterprise Innovation Survey for seven countries in Sub Saharan Africa. Regulatory compliance has a positive and significant effect on firm innovativeness. Increased use of government non-financial support enhances the level of firm regulatory compliance and the effect of regulatory compliance on firm innovativeness. The study contributes to the literature on compliance and firm innovativeness in Africa by showing how the positive effect of regulatory compliance on firm innovativeness is stronger when firms benefit from government non-financial support.

Suggested Citation

  • Sam Njinyah & Simplice A. Asongu & Ngozi B. Adeleye, 2022. "The interaction effect of government non-financial support and firm’s regulatory compliance on firm innovativeness in Sub Saharan Africa," Working Papers of the African Governance and Development Institute. 22/074, African Governance and Development Institute..
    • Handle: RePEc:agd:wpaper:22/074
    as

    Download full text from publisher

    File URL: http://www.afridev.org/RePEc/agd/agd-wpaper/The-interaction-effect-of-government-non-financial-support-and-firm-regulatory-compliance.pdf
    File Function: Revised version, 2022
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hong, Jin & Feng, Bing & Wu, Yanrui & Wang, Liangbing, 2016. "Do government grants promote innovation efficiency in China's high-tech industries?," Technovation, Elsevier, vol. 57, pages 4-13.
    2. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    3. Apanasovich, Natalja & Alcalde Heras, Henar & Parrilli, Mario Davide, 2016. "The impact of business innovation modes on SME innovation performance in post-Soviet transition economies: The case of Belarus," Technovation, Elsevier, vol. 57, pages 30-40.
    4. MacKenzie, Scott B. & Podsakoff, Philip M., 2012. "Common Method Bias in Marketing: Causes, Mechanisms, and Procedural Remedies," Journal of Retailing, Elsevier, vol. 88(4), pages 542-555.
    5. Heredia Pérez, Jorge A. & Geldes, Cristian & Kunc, Martin H. & Flores, Alejandro, 2019. "New approach to the innovation process in emerging economies: The manufacturing sector case in Chile and Peru," Technovation, Elsevier, vol. 79(C), pages 35-55.
    6. Paraskevopoulou, Evita, 2012. "Non-technological regulatory effects: Implications for innovation and innovation policy," Research Policy, Elsevier, vol. 41(6), pages 1058-1071.
    7. Xi Yang & Yang Yao, 2012. "Environmental Compliance and Firm Performance: Evidence from China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(3), pages 397-424, June.
    8. Maksim Belitski & Farzana Chowdhury & Sameeksha Desai, 2016. "Taxes, corruption, and entry," Small Business Economics, Springer, vol. 47(1), pages 201-216, June.
    9. Chin‐jung Luan & Chengli Tien & Pei‐hua Wu, 2013. "Strategizing Environmental Policy and Compliance for Firm Economic Sustainability: Evidence from Taiwanese Electronics Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 22(8), pages 517-546, December.
    10. Schøtt, Thomas & Jensen, Kent Wickstrøm, 2016. "Firms’ innovation benefiting from networking and institutional support: A global analysis of national and firm effects," Research Policy, Elsevier, vol. 45(6), pages 1233-1246.
    11. Alvaro Cuervo-Cazurra & Ulf Andersson & Mary Yoko Brannen & Bo Bernhard Nielsen & A. Rebecca Reuber, 2016. "From the Editors: Can I trust your findings? Ruling out alternative explanations in international business research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 47(8), pages 881-897, October.
    12. Wadho, Waqar & Chaudhry, Azam, 2018. "Innovation and firm performance in developing countries: The case of Pakistani textile and apparel manufacturers," Research Policy, Elsevier, vol. 47(7), pages 1283-1294.
    13. 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.
    14. Teresa García‐Marco & Ferdaous Zouaghi & Mercedes Sánchez, 2020. "Do firms with different levels of environmental regulatory pressure behave differently regarding complementarity among innovation practices?," Business Strategy and the Environment, Wiley Blackwell, vol. 29(4), pages 1684-1694, May.
    15. Szczygielski, Krzysztof & Grabowski, Wojciech & Pamukcu, Mehmet Teoman & Tandogan, Vedat Sinan, 2017. "Does government support for private innovation matter? Firm-level evidence from two catching-up countries," Research Policy, Elsevier, vol. 46(1), pages 219-237.
    16. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    17. Girma, Sourafel & Gong, Yundan & Görg, Holger, 2009. "What Determines Innovation Activity in Chinese State-owned Enterprises? The Role of Foreign Direct Investment," World Development, Elsevier, vol. 37(4), pages 866-873, April.
    18. Ulf Andersson & Alvaro Cuervo-Cazurra & Bo Bernhard Nielsen, 2014. "From the Editors: Explaining interaction effects within and across levels of analysis," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 45(9), pages 1063-1071, December.
    19. Smallbone, David & Welter, Friederike, 2001. "The Distinctiveness of Entrepreneurship in Transition Economies," Small Business Economics, Springer, vol. 16(4), pages 249-262, June.
    20. Herman Aguinis & Angelo M. Solarino, 2019. "Transparency and replicability in qualitative research: The case of interviews with elite informants," Strategic Management Journal, Wiley Blackwell, vol. 40(8), pages 1291-1315, August.
    21. Rachel Bocquet & Christian Le Bas & Caroline Mothe & Nicolas Poussing, 2017. "CSR, Innovation, and Firm Performance in Sluggish Growth Contexts: A Firm-Level Empirical Analysis," Journal of Business Ethics, Springer, vol. 146(1), pages 241-254, November.
    22. Olthaar, Matthias & Dolfsma, Wilfred & Lutz, Clemens & Noseleit, Florian, 2017. "Markets and institutional swamps: tensions confronting entrepreneurs in developing countries," Journal of Institutional Economics, Cambridge University Press, vol. 13(2), pages 243-269, June.
    23. Jugend, Daniel & Jabbour, Charbel Jose Chiappeta & Alves Scaliza, Janaina A. & Rocha, Robson Sø & Junior, José Alcides Gobbo & Latan, Hengky & Salgado, Manoel Henrique, 2018. "Relationships among open innovation, innovative performance, government support and firm size: Comparing Brazilian firms embracing different levels of radicalism in innovation," Technovation, Elsevier, vol. 74, pages 54-65.
    24. Gori Olusina Daniel & Kun Fu & Wilfred Dolfsma, 2018. "Institutional Quality and Economic Development in Sub-Saharan Africa: Can Management Effort and Bribes Compensate for Low-Quality Institutions?," Journal of Economic Issues, Taylor & Francis Journals, vol. 52(2), pages 473-482, April.
    25. Burrus, Robert T. & Edward Graham, J. & Jones, Adam T., 2018. "Regional innovation and firm performance," Journal of Business Research, Elsevier, vol. 88(C), pages 357-362.
    26. Cirera, Xavier & Muzi, Silvia, 2020. "Measuring innovation using firm-level surveys: Evidence from developing countries✰," Research Policy, Elsevier, vol. 49(3).
    27. Blind, Knut, 2012. "The influence of regulations on innovation: A quantitative assessment for OECD countries," Research Policy, Elsevier, vol. 41(2), pages 391-400.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prokop, Viktor & Hajek, Petr & Stejskal, Jan, 2021. "Configuration Paths to Efficient National Innovation Ecosystems," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    2. Thakur-Wernz, Pooja & Bosse, Douglas, 2023. "Configurational framework of learning conduits used by emerging economy firms to improve their innovation performance," Journal of Business Research, Elsevier, vol. 157(C).
    3. Chundakkadan, Radeef & Sasidharan, Subash, 2023. "The role of government support on E-commerce and firm innovation during pandemic crisis," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 904-913.
    4. Dwibedy, Punyashlok, 2022. "Informal competition and product innovation decisions of new ventures and incumbents across developing and transitioning countries," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    5. Aishwarya Narayan & Sumukh Hungund, 2022. "Enhancing Firm Performance Through Adoption of Innovation: an Empirical Evidence from Indian Biotechnological Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(3), pages 2431-2456, September.
    6. Ramadani, Veland & Hisrich, Robert D. & Abazi-Alili, Hyrije & Dana, Léo-Paul & Panthi, Laxman & Abazi-Bexheti, Lejla, 2019. "Product innovation and firm performance in transition economies: A multi-stage estimation approach," Technological Forecasting and Social Change, Elsevier, vol. 140(C), pages 271-280.
    7. Christian Linder & Michael Nippa, 2019. "Jumping in at the deep end! The role of motivational forces in starting a new venture," International Entrepreneurship and Management Journal, Springer, vol. 15(4), pages 1363-1391, December.
    8. Hameeda A. AlMalki & Christopher M. Durugbo, 2023. "Systematic review of institutional innovation literature: towards a multi-level management model," Management Review Quarterly, Springer, vol. 73(2), pages 731-785, June.
    9. Elias G. Carayannis & Luca Dezi & Gianluca Gregori & Ernesto Calo, 2022. "Smart Environments and Techno-centric and Human-Centric Innovations for Industry and Society 5.0: A Quintuple Helix Innovation System View Towards Smart, Sustainable, and Inclusive Solutions," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 926-955, June.
    10. Ketan Reddy & Radeef Chundakkadan & Subash Sasidharan, 2021. "Firm innovation and global value chain participation," Small Business Economics, Springer, vol. 57(4), pages 1995-2015, December.
    11. Chei Bukari & Emm anuel Atta Anaman, 2021. "Corruption and firm innovation: a grease or sand in the wheels of commerce? Evidence from lower-middle and upper-middle income economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(2), pages 267-302, June.
    12. Pindado, Emilio & Sánchez, Mercedes & García Martínez, Marian, 2023. "Entrepreneurial innovativeness: When too little or too much agglomeration hurts," Research Policy, Elsevier, vol. 52(1).
    13. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan, 2019. "Institutional determinants of R&D investment: Evidence from emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 34-44.
    14. Gonzalo Molina-Sieiro & Katia M. Galdino & R. Michael Holmes, 2023. "Ownership types, institutions, and the internationalization of emerging economy new ventures: evidence from Africa," Small Business Economics, Springer, vol. 60(3), pages 1121-1145, March.
    15. Kwangsoo Shin & Minkyung Choy & Chul Lee & Gunno Park, 2019. "Government R&D Subsidy and Additionality of Biotechnology Firms: The Case of the South Korean Biotechnology Industry," Sustainability, MDPI, vol. 11(6), pages 1-22, March.
    16. Mukhamad Najib & Abdul Aziz Abdul Rahman & Farah Fahma, 2021. "Business Survival of Small and Medium-Sized Restaurants through a Crisis: The Role of Government Support and Innovation," Sustainability, MDPI, vol. 13(19), pages 1-16, September.
    17. Dahms, Sven, 2019. "Foreign-owned subsidiary knowledge sourcing: The role of location and expatriates," Journal of Business Research, Elsevier, vol. 105(C), pages 178-188.
    18. Medase, Kehinde, 2019. "The Impact of the Heterogeneity of Employees’ Qualifications on Firm-level Innovation Evidence from Nigerian Firms," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203563, Verein für Socialpolitik / German Economic Association.
    19. Rodríguez, Alicia & Hernández, Virginia & Nieto, María Jesús, 2022. "International and domestic external knowledge in the innovation performance of firms from transition economies: The role of institutions," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    20. Herman Aguinis & Wayne F. Cascio & Ravi S. Ramani, 2017. "Science’s reproducibility and replicability crisis: International business is not immune," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(6), pages 653-663, August.

    More about this item

    Keywords

    Regulatory Compliance; Firm Innovativeness; government non-financial Support; and Sub Saharan Africa (SSA);
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:agd:wpaper:22/074. 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.

    If CitEc recognized a bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Asongu Simplice (email available below). General contact details of provider: https://edirc.repec.org/data/agdiycm.html .

    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.