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Dynamics of Innovation and Internationalization among Small and Medium-Sized Enterprises in Viet Nam

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  • Trinh, Long Q.

    (Asian Development Bank Institute)

Abstract

This paper examines the bidirectional causality between innovation and internationalization in the context of developing countries. Using a dynamic bivariate probit model and adopting a broad definition of internationalization, this paper analyzes these issues using a panel dataset of small and medium-sized enterprises in Viet Nam. The results show a high persistence in process and product innovations and internationalization decisions. Furthermore, we find that, for non-micro firms, past internationalization has a positive effect on process innovation, but past process innovation does not have a significant effect on the internationalization decision. For this group of firms, we also find signs of cross-dependence between process innovation and the internationalization decision. Our results, however, do not show dynamic interdependence between internationalization and product innovation.

Suggested Citation

  • Trinh, Long Q., 2016. "Dynamics of Innovation and Internationalization among Small and Medium-Sized Enterprises in Viet Nam," ADBI Working Papers 580, Asian Development Bank Institute.
  • Handle: RePEc:ris:adbiwp:0580
    as

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    References listed on IDEAS

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    More about this item

    Keywords

    SME internationalization and innovation; process innovation; cross-dependence; product innovation;

    JEL classification:

    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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