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


  • Ngoc Mai, Anh
  • Vu Van, Huong
  • Bui Xuan, Bien


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.

Suggested Citation

  • Ngoc Mai, Anh & Vu Van, Huong & Bui Xuan, Bien, 2019. "The lasting effects of innovation on firm profitability: Panel evidence from a transitional economy," MPRA Paper 98168, University Library of Munich, Germany, revised 2019.
  • Handle: RePEc:pra:mprapa:98168

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    Innovation; firm profitability; and SMEs;

    JEL classification:

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

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